This range is not only a key point from a technical perspective but is also highly tied to the leverage liquidation risk of centralized exchanges (CEX). If the price of Ethereum breaks above $4500, the cumulative short liquidation pressure faced by mainstream CEXs (such as Binance, Coinbase, Kraken, etc.) will reach $1.485 billion; conversely, if the price falls below $4200, the long liquidation pressure on these platforms could rise to $2.216 billion.
It should be clarified that these two sets of data do not represent the exact 'value of contracts to be liquidated' but are a comprehensive estimation based on the current open contract size, leverage distribution, and historical liquidation patterns. The core logic is that when asset prices reach critical points, leveraged traders (shorts or longs) who lack sufficient margin will be forcibly liquidated by the exchange, and the liquidation pressure reflects the potential selling (or buying) orders that may be released during this process.
From the design of the liquidation chart, the height of the bar chart does not directly correspond to specific amounts but presents the density of liquidation clusters at different price levels through relative proportions. For example, the long liquidation bar below $4200 is significantly higher than the short liquidation bar above $4500, indicating that if the price falls below $4200, the concentrated long leveraged positions in this area are denser, and the chain reaction caused by forced liquidations (such as further price drops) may be more severe; conversely, when breaking above $4500, the impact of short liquidations on the market is relatively mild.
This phenomenon is closely related to the current market structure: recently, many long traders have chosen to set stop-loss orders around $4200 or use this as a benchmark for leverage, causing this price level to become a 'risk concentration area' for longs; meanwhile, the shorts' defense at $4500 is relatively dispersed, resulting in less liquidation pressure after a breakout. Historically, similar liquidations have often triggered short-term market fluctuations—when Ethereum broke $4000 in 2021, short liquidations exceeded $1 billion in a single day, directly driving the price up by 15% in that day; conversely, when it fell below $1800 in 2022, a wave of long liquidations caused the price to drop by 8% in a single day.
Therefore, the current liquidation intensity data serves more as a 'risk warning': it alerts traders that the $4200-$4500 range is not only a battleground for technical longs and shorts but also a 'sensitive area' for leveraged funds, and a price break in either direction may trigger liquidity fluctuations due to liquidation, thereby amplifying short-term market movements.
If you are still confused in the crypto world, lacking firsthand information and professional guidance, you might want to follow Ming Ge. Ming Ge has been deeply involved in the crypto space for many years and shares rich experiences and real operational insights every day!#ETH
