BlockBeats reported on Aug. 15, citing data from Coinglass, that Bitcoin could face sizable liquidation pressure on both sides of the market near two closely watched price levels. If BTC falls below $62,000, the cumulative long liquidation intensity across major centralized exchanges could reach 803 million. On the upside, if Bitcoin breaks above $64,000, the cumulative short liquidation intensity across major CEXs could climb to 888 million.
The report also included an important clarification on how to read Coinglass liquidation maps. According to BlockBeats, the chart does not show the exact number of contracts waiting to be liquidated, nor the exact value of contracts that would be forced out. Instead, the bars on the chart reflect the relative importance, or intensity, of each liquidation cluster compared with nearby clusters. In practical terms, the map is used to show how strongly the market could be affected if the underlying asset reaches a certain price zone. Higher bars indicate a potentially stronger reaction driven by a wave of liquidity once price touches that level.
Bitcoin may run into notable liquidation pressure near $62,000 on the downside and $64,000 on the upside, according to Coinglass data cited by BlockBeats on Aug. 15.
The report said cumulative long liquidation intensity across major centralized exchanges would reach 803 million if Bitcoin drops below $62,000. If BTC breaks above $64,000, cumulative short liquidation intensity across major CEXs would reach 888 million.
What the liquidation map shows
BlockBeats added that the liquidation map is not a display of the exact number of contracts awaiting liquidation, or the precise value of contracts that would be liquidated.
Instead, the bars on the chart show the relative importance of each liquidation cluster compared with nearby clusters, which the outlet described as intensity. By that measure, the map indicates how strongly the market may be affected if the underlying asset reaches a given price level. A taller liquidation bar suggests that once price arrives there, the reaction may be stronger because of a wave of liquidity.
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