poolcodWhat is a Bitcoin liquidity pool?
The phrase describes different mechanisms depending on the market. In decentralized finance, a liquidity pool is a reserve of tokens deposited in a smart contract. Traders exchange assets against that reserve and the protocol defines the pricing and fee rules.
On a derivatives heatmap, “pool” usually refers to a concentration of leveraged positions that could be forced to close around a price range. These future liquidation levels are not published account by account. A map therefore estimates concentration from public market variables and liquidation mechanics.
A DeFi pool is an on-chain reserve. A liquidation pool is a statistical area of potential forced orders in leveraged markets. They should not be treated as the same thing.
What a liquidation map represents
The map places price on the vertical axis and time on the horizontal axis. Horizontal bands indicate areas where the model detects a higher or lower relative concentration of potential liquidations. Candles show the actual price path through those areas.
Blue bands have lower relative intensity in the current view. Green, yellow and orange indicate progressively stronger visible concentration. The colors are normalized to the selected market, history and timeframe, so they are useful for comparison inside one view rather than as universal quantities.
Vertical levels
Each band is aligned with a price range, not with a guaranteed target.
Persistence
The horizontal extent helps show when a modeled concentration appeared and how long it remained visible.
Relative scale
Brighter colors mean stronger concentration compared with other zones in the active view.
Confirmed points
Real liquidation markers are executions already reported by an exchange, not pending orders.
Real liquidations versus estimated pools
Poolcod keeps both layers separate. Real liquidation events come from public exchange streams after an execution occurs. They include the exchange, contract, side, price, quantity and event time when the source provides those fields.
Estimated pools use real public inputs such as OHLC candles, volume, taker flow, open interest and leverage scenarios. The inputs are observed data, but the resulting future level remains an inference because exchanges do not disclose every trader’s position, collateral or liquidation price.
This distinction matters: a real event confirms something that happened; an estimated band describes a scenario that may change or never be reached.
How to evaluate a relevant zone
Locate intensity
Identify the strongest bands above and below the current price without assuming either side must be visited.
Check persistence
See whether the area remains visible across updates instead of relying on one unusual candle.
Compare timeframes
Use a lower interval for detail and a higher one for broader structure.
Confirm context
Review price structure, volume, open interest, volatility and real liquidation flow.
A bright pool is not an automatic entry, stop or take-profit level. Distance from price, intervening market structure and the possibility that positioning changes all affect how useful the zone remains.
Limits of liquidity data
- Public order-book liquidity can be changed or cancelled before execution.
- Historical volume describes completed trading, not guaranteed future supply.
- Estimated pools cannot know private collateral or every account decision.
- Real-event coverage and reporting frequency differ by exchange.
- Map colors are relative to the visible data and do not express a fixed probability.
Use the map to organize evidence and compare scenarios. It is an analysis surface, not a promise about where price will move and not financial advice.
Frequently asked questions
Does a liquidity pool always attract price?
No. A concentration may coincide with potential activity, but it can weaken, disappear or remain untouched as positioning changes.
Are poolcod pools real positions?
No. Future pools are clearly marked as estimated. Confirmed liquidation points represent real events already reported by public exchange feeds.
Which timeframe should I use?
It depends on your horizon. Fifteen minutes often balances detail and context, but comparing it with a higher timeframe gives a more complete view.