> For the complete documentation index, see [llms.txt](https://help.trade.fun/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://help.trade.fun/perps-spot/perpetual-spot-page/liquidation-depth.md).

# Liquidation Depth

<figure><img src="/files/KLO4YJENeqxsQurhuuWl" alt=""><figcaption><p>Liquidation Depth Chart</p></figcaption></figure>

### Purpose

This chart allows traders to visualize where large amounts of **forced liquidations** may happen, helping them anticipate volatile moves caused by **liquidation cascades**.

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### Chart Details

* **X-Axis**: BTC price levels
* **Left Y-Axis**: Cumulative liquidation value in USD
* **Right Y-Axis**: Liquidation size (contracts/tokens)

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### Layers

* **Long Liquidation Size / Value (Red)** – Positions that will be liquidated if price drops.
* **Short Liquidation Size / Value (Green)** – Positions that will be liquidated if price rises.
* **Dashed Line** – Indicates the current market price.

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### Why It Matters

* **Volatility Forecasting** – Anticipate sharp moves if price nears a **cluster of liquidations**.
* **Entry Timing** – Identify levels where liquidations may cause **short-term wicks** or **slippage**.
* **Risk Awareness** – Avoid entering positions near price levels packed with liquidation risk.
* **Market Maker Behavior** – Market makers may intentionally move price to **trigger liquidations** of large nearby positions, as it's an opportunity for them to capture volume and fees.

This tool is critical for understanding **where the pain points are in the market** – and who might be targeting them.


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