# Liquidation Levels Liquidation Levels is an indicator on [Vela](https://vela.luxalgo.com/chart), our next-generation charting platform, written in Pine Script®. Liquidation Levels projects the prices where clusters of highly leveraged longs and shorts would be forced out, marking each detection with a significance-sized bubble and zone lines for 100x, 50x, and 25x tiers. Because price is often drawn toward these zones, the levels double as targets, stop-placement guides, and early volatility warnings. - Indicator in the LuxAlgo Library, by LuxAlgo, published Oct 19, 2023. - Access: free. - Concepts: [Liquidation Clusters](https://www.luxalgo.com/library/concept/liquidation-clusters/) (primary), [Liquidity Pool](https://www.luxalgo.com/library/concept/liquidity-pool/) - Open on Vela: https://vela.luxalgo.com/chart?pineScriptCodeId=cmpwn2wt50041vhsgg4ie1ztw - Page: https://www.luxalgo.com/library/indicator/liquidation-levels/ **Liquidation Levels** projects where the market's forced exits are likely parked, so you see the magnets before price does. It watches for bars carrying significant trading activity, then anchors [clusters of leveraged positions](https://www.luxalgo.com/library/concept/liquidation-clusters/) to them: a bubble marks the event, sized by its potential significance, and lines extend the estimated liquidation zones for common high-leverage tiers (100x, 50x, and 25x, long and short, each removable or customizable). Since markets tend to seek out these [liquidity pools](https://www.luxalgo.com/library/concept/liquidity-pool/), the levels serve as both destinations and hazard zones. ## How to Trade the Liquidation Levels? - **Bubbles**: appear on bars where larger trading activity is detected; the bigger the bubble, the more significant the potential liquidation cluster. - **Level lines**: each line attached to a bubble marks the price where a given leverage tier would be forced out, the liquidation zone at that price. - **Price attraction**: price generally moves toward these zones, which makes untouched levels useful for framing targets, informed stop-loss placement, and areas where volatility may ignite. The map doubles as a sentiment read: where the zones accumulate shows which side of the market is carrying the most leveraged risk. ## Liquidation Levels Settings - **Reference Price**: the base price the liquidation levels are calculated from. - **Volume Threshold**: the primary trigger: how much trading activity a bar needs before levels are drawn from it. - **Volatility Threshold**: a secondary trigger that qualifies sharp price moves even when trading activity is lower. - **Leverage Options**: choose which leverage values are tracked and set colors for the resulting levels. - **Hide Liquidation Bubbles / Hide Liquidation Levels**: toggle the bubbles and the zone lines independently. ## Frequently Asked Questions ### Why does price move toward liquidation levels? Each level marks a dense cluster of leveraged positions that would be forced to close there. Markets in general gravitate toward such zones, which is exactly what makes untouched levels useful as targets and caution areas. ### Can I combine it with swing-based liquidity tools? Yes, and the pairing is natural: the [Buyside & Sellside Liquidity indicator](https://www.luxalgo.com/library/indicator/buyside-sellside-liquidity/) approaches the same magnet logic from swing structure, while Liquidation Levels derives its zones from leverage math around high-activity bars. Confluence between the two flags a level worth taking seriously. ### How do I access the Liquidation Levels indicator? Free, via the LuxAlgo Library. It can also be run in Quant, our coding agent, directly from this page to see how the levels behave on your market. You can also copy the source code from this page and run it anywhere Pine Script® runs. ## Related indicators - [Liquidations Meter](https://www.luxalgo.com/library/indicator/liquidations-meter/) (Liquidation Clusters): markdown at https://www.luxalgo.com/library/indicator/liquidations-meter.md - [Crypto Liquidation Heatmap](https://www.luxalgo.com/library/indicator/crypto-liquidation-heatmap/) (Liquidation Clusters): markdown at https://www.luxalgo.com/library/indicator/crypto-liquidation-heatmap.md - [Liquidation Estimates (Real-Time)](https://www.luxalgo.com/library/indicator/liquidation-estimates-real-time/) (Liquidation Clusters): markdown at https://www.luxalgo.com/library/indicator/liquidation-estimates-real-time.md - [Volume Bubbles & Liquidity Heatmap](https://www.luxalgo.com/library/indicator/volume-bubbles-liquidity-heatmap/) (Liquidation Clusters): markdown at https://www.luxalgo.com/library/indicator/volume-bubbles-liquidity-heatmap.md - [Liquidity Swings](https://www.luxalgo.com/library/indicator/liquidity-swings/) (Liquidity Pool): markdown at https://www.luxalgo.com/library/indicator/liquidity-swings.md - [Liquidity Levels](https://www.luxalgo.com/library/indicator/liquidity-levels/) (Liquidity Pool): markdown at https://www.luxalgo.com/library/indicator/liquidity-levels.md - [Bitcoin Power Law Clock](https://www.luxalgo.com/library/indicator/bitcoin-power-law-clock/) (Crypto Cycle Models): markdown at https://www.luxalgo.com/library/indicator/bitcoin-power-law-clock.md - [Bitcoin Power Law](https://www.luxalgo.com/library/indicator/bitcoin-power-law/) (Crypto Cycle Models): markdown at https://www.luxalgo.com/library/indicator/bitcoin-power-law.md --- Source: https://www.luxalgo.com/library/indicator/liquidation-levels/ (LuxAlgo Library). Free to use with attribution: https://www.luxalgo.com/library/license/