Position Heatmap

1. What the Heatmap Shows

This app visualizes the flow of positions (longs vs shorts, openings vs closings) directly on the price chart:

• We track Open Interest (OI) – the total number of outstanding contracts.

• We track taker activity – whether aggressive buyers (longs) or aggressive sellers (shorts) dominated the trades in each candle.

• We combine the two:

  • If OI goes up, new positions are being opened.

  • If OI goes down, existing positions are being closed.

  • The side (long or short) is inferred from taker flow:

    • Taker buys dominate → long side.

    • Taker sells dominate → short side.

Each price band on the chart accumulates these flows over time, producing bright streaks where strong positioning happened.

2. How to Read the Map

On the heatmap you’ll see colors and hover labels:

• Bright bullish streaks (yellow, positive side):

  • Longs Opening (new long positions opened).

  • Shorts Closing (shorts covering → bullish effect).

• Bright bearish streaks (Purple , negative side):

  • Shorts Opening (new shorts entered).

  • Longs Closing (longs taking profit → bearish effect).

• Hover tooltip tells you exactly what happened at that spot:

  • “Longs opening”

  • “Shorts opening”

  • “Longs closing”

  • “Shorts closing”

So you’re not guessing — you know which type of flow dominated.

Longs

3. Why It’s Useful for Real Trading

This tool gives you insight into positioning pressure that pure price or volume cannot show:

• Detect real conviction:

  • If price rises and you see longs opening, it’s real bullish conviction.

  • If price rises but only shows shorts closing, that’s a squeeze — not new conviction.

• Spot absorption / traps:

  • If price barely moves but map shows shorts opening heavily, shorts are absorbing — often leads to squeeze.

  • If price stalls while longs keep opening, longs may be trapped → risk of flush.

• Time entries & exits:

  • Confirm whether a breakout is supported by new opens (strong) or just closing flow (weak, can fade).

  • Fade overheated zones where one side kept adding but price stopped moving.

• Context for funding & sentiment:

  • Combine with funding data → high funding + longs opening = dangerous overcrowding.

  • Neutral funding but heavy shorts opening = potential squeeze fuel.

4. How Traders Can Use It

• Scalpers: Track intraday squeezes → when shorts pile in at lows, expect sharp counter-moves.

• Swing traders: Confirm if your breakout/reversal entry is supported by fresh opens or just short/long covering.

• Risk managers: Avoid adding when your side is already crowded; use heatmap to exit when you see opposite flows building.

5. Key Takeaway

The Liqzone Position Heatmap transforms raw derivatives data into an X-ray of market positioning:

• It separates who is opening vs who is closing.

• It shows you where in price space positions were built.

• It highlights when price action is fueled by conviction vs liquidation.

👉 Trading edge: By knowing if a rally is new longs or just shorts squeezed, you can decide whether to ride it, fade it, or get out.