BTC Liquidation Zone Emerges, Market Hiding Trend Reversal Signals?
From the 24-hour Binance BTC/USDT perpetual contract liquidation heatmap provided by Coinglass, a clear liquidation zone has emerged in the current market, serving as an important reference for short-term price trends and market sentiment.
Heatmap Interpretation:
The liquidation zone is concentrated around 108,000 and 110,000.
In the chart, green to yellow represents liquidation intensity; the brighter the color, the higher the liquidation amount occurring in that price range. Currently, multiple bright bands form in the 108,000 - 110,000 USDT range, indicating this is the area where both bulls and bears are fiercely contesting, and liquidation orders are most concentrated.
This indicates that a significant amount of leveraged funds had positioned long/short positions in this area, which were subsequently liquidated during the volatile market. Especially when the price approaches 110,000, multiple high-density liquidation bands appear above, implying that the bulls face strong counteracting pressure from funds.
Price action shows a 'Converging Volatility' structure.
From the overlaid candlestick patterns in the chart, it can be seen that since 19:00 on July 6, the BTC price has displayed multiple patterns of sharp rises and subsequent pullbacks, oscillating between 108,000 and 110,000, showing a clear converging consolidation characteristic.
This structure indicates that the main force is rotating positions in this area, with the market accumulating momentum for the next trend, combined with the formation of the liquidation zone, often suggesting that a directional choice will soon be made.
3. Liquidity Bias: More Abundant Liquidity Below
From the heat distribution, it can be observed that the lower part (especially in the 106,000 - 108,000 range) has a higher concentration of liquidation orders, indicating that once there is a downward breakthrough, the abundant liquidity and the liquidation cascade could be more damaging. Conversely, if it breaks upward past 110,000, the fewer liquidation zones may lead to weaker liquidity and greater upward potential.
Summary and Trading Suggestions:
Be cautious of a trend reversal in the short term, focusing on the breakout directions of the two key levels at 108,000 and 110,000.
Contract players should control leverage to avoid frequently chasing orders in the liquidation zone;
If the price strongly breaks past 110,000, it is recommended to take a light position in long orders, targeting around 112,000;
If it falls below 108,000, precautions should be taken against potential cascading liquidation events, as short positions may possess significant momentum.
