Glossary ยท Derivatives
Liquidation
Forced closure of a leveraged position when margin falls below the maintenance threshold.
Definition
A liquidation is the forced closure of a leveraged crypto position by the exchange or protocol when the trader's margin falls below the maintenance requirement. Large liquidation clusters can trigger cascades: each forced sell pushes price down, liquidating more positions, which pushes price further. Spectre AI's Liquidation Heatmap visualises cluster levels across Binance, OKX, Bybit, Deribit, and Hyperliquid so traders can anticipate cascade zones.
See this concept live in Spectre AI: /liquidation-heatmap