Did you know that futures markets influence the spot price of cryptocurrencies? And that you can use that information to your advantage with liquidation maps. 🤔

First, the basics:

  • Long/Short: Buying "long" means betting that the price will rise. Selling "short" is betting that it will fall.

  • Settlement:If the price moves against you and you do not have enough margin, your futures position is automatically closed. This is called liquidation.

What are settlement maps?

These are tools that show where large buy (long) and sell (short) orders accumulate in futures markets. Imagine a heat map: red areas indicate many short orders (possible bearish pressure), while green areas indicate many long orders (possible bullish pressure).

How to use them to buy on spot?

  • Identify entry points: If you see a large accumulation of shorts at a price level, it could be a good area to buy spot. Why? Because if those short orders are liquidated, the price can quickly rise.

  • Confirm trends: Liquidation charts help you confirm whether an uptrend or downtrend is strong. If you see a lot of long orders in an uptrend, that's a positive sign.

Example:

Imagine Bitcoin is at $30,000 and the map shows a large concentration of shorts at $29,500. If the price drops to that level and orders are liquidated, buying pressure could push the price higher, creating a spot buying opportunity.

Remember:

  • Liquidation maps are just one more tool in your arsenal. Combine them with technical and fundamental analysis.

  • No tool is 100% accurate. The market can always surprise.

Extra tip:

Use clearance maps to improve your DCA (Dollar Cost Averaging) strategy. Buy more when the map shows potential entry points.

PDT I leave you several BTC liquidation maps to illustrate what I'm talking about.

#SettlementMaps#Futures#Spot#Trading#Binance #DCA

Now it's your turn! Do you use settlement maps in your strategy? What other indicators do you like to combine with them? Share your experience in the comments! 👇 And don't forget to like and share this post if you found it useful. 👍