Recently, I’ve been observing an interesting phenomenon in the crypto market: how market makers use liquidation maps to understand market momentum. This tool may seem simple, but the logic behind it is worth every trader understanding.

First, let’s clarify what a liquidation map is. In essence, it visualizes all the price levels at which all possible leveraged positions in the current market could be liquidated. When you trade with borrowed funds, once the price touches a certain level, your position will be automatically closed to cover the debt. A liquidation map marks these risk points, showing how many positions are clustered at which price levels.

This is where market makers find their opportunity. With large capital and advanced data analytics tools, they can clearly spot weaknesses in the market. For example, if a liquidation map shows a large concentration of shorts at a particular price, market makers may push the price higher to trigger those liquidations and profit from them. The same works in the opposite direction: if there are too many longs, they might drive the price down. This kind of manipulation can look like normal price fluctuations, but in reality it’s carefully engineered.

There are several playbooks market makers use to read liquidation maps. First, they study market sentiment. When the market is crowded with highly leveraged longs, market makers may go against the trend—pushing down the price to create a chain reaction of liquidations. Second, they hunt stop-loss orders using price spikes. They manufacture sharp, short-term volatility and precisely target those price points where stops or liquidation clusters are concentrated. Once a large number of positions have been liquidated and liquidity has been absorbed, the price tends to continue moving in the direction they want.

From a liquidity perspective, liquidation maps also help market makers understand how funds are distributed. Large capital needs to identify suitable liquidity windows for both entry and exit, and the liquidation map becomes a blueprint for strategy planning. Support and resistance levels often coincide with places where liquidations have accumulated; once those levels are broken, large-scale liquidations may be triggered, leading to further price movement.

So how can ordinary traders protect themselves? First, the most direct method is to reduce leverage. The lower the leverage, the smaller the risk of being hunted. Second, you should learn to read liquidation maps and analyze potential manipulation levels in the market. Finally, diversify your positions—don’t stack all your “chips” at a single price point—so that even if it gets triggered, your losses are reduced.

In today’s market, BTC is around 82.54K, up 1.84% over the past 24 hours; BNB is 651.10, up 3.67%; and SOL is even more aggressive, rising to 89.79 with a 5.73% gain. In this kind of volatility, understanding the logic of liquidation maps becomes even more important. It’s not about completely avoiding market makers, but about understanding the rules of this game—so you can last longer.