poolcodWhat is a liquidity zone?
In broad terms, it is a price range where enough buying or selling activity exists—or may appear—to facilitate many executions. The exact meaning depends on the source. An order book shows current intentions, volume records completed trades and a liquidation map models risk associated with leveraged positions.
No single layer describes the entire market. A visible limit order can be cancelled, historical volume has already traded, and a future liquidation pool can change as participants add collateral, close positions or open new ones.
Advertised liquidity
Visible limit orders that may execute, move or be cancelled.
Traded liquidity
Transactions that already found a counterparty and were completed.
Liquidation risk
Areas where leveraged positions may be forced to close.
Asset reserves
Tokens deposited in smart contracts to facilitate swaps or other operations.
Four types of liquidity that are often confused
1. Order-book depth
Depth measures the visible limit orders available around different prices. It helps estimate potential slippage, but the orders can change before execution and the view belongs only to the exchange being queried.
2. Executed volume
Volume measures how much actually traded during a period. It is evidence of past activity, not a reserve that remains available at the same level.
3. Liquidation pools
These represent potential concentrations of leveraged positions. Liquidations create forced closing orders when margin no longer covers risk. Because complete account information is private, future levels must be modeled as estimates.
4. DeFi pools
These are token reserves held by smart contracts. Their balances and rules can be inspected on-chain, and their purpose differs from a futures liquidation heatmap.
How to identify a relevant zone without overinterpreting it
A zone deserves analytical attention when several pieces of context align, not simply because one line is bright. Persistence, distance from current price, coherence across timeframes and changes in volume or open interest help evaluate whether the concentration remains informative.
Persistence
Check whether the area survives several updates and does not depend on one candle.
Distance
Evaluate the move required to reach it and the price structure between both levels.
Timeframe
Compare a lower interval for detail with a higher one for broader structure.
Confirmation
Review volume, open interest, volatility and actual price behavior.
The market can absorb volume, change positioning or move elsewhere before reaching the zone.
What type of liquidity poolcod displays
Poolcod focuses on perpetual markets and overlays three components: real candles and public market context, liquidation events reported by Binance, Bybit and Gate, and statistical bands that approximate potential liquidation concentration.
The layers remain visually separate. Real events confirm forced closes that already executed. Estimated bands use public inputs such as candles, volume, taker flow, open interest and leverage scenarios; they are not presented as known private orders.
Users can change the market, timeframe, historical depth, exchanges, liquidation side and minimum intensity. Each adjustment changes the active dataset and should be considered when comparing two views.
Limitations to preserve in your analysis
- Order-book liquidity can be removed before it executes.
- Historical volume does not guarantee an equivalent future counterparty.
- Estimated pools cannot know every trader’s extra collateral or private decisions.
- Coverage and event frequency vary between exchanges.
- Colors are relative to the view and do not represent a fixed probability.
A liquidity tool should help organize information and test scenarios. It should not automatically make a financial decision or replace independent confirmation and risk management.
Frequently asked questions
Does a liquidity zone always attract price?
No. It may coincide with potential activity, but it can weaken or disappear without being reached.
Do the order book and liquidation map show the same thing?
No. The order book shows current visible orders; the liquidation map combines already executed forced closes with estimated leveraged-risk zones.
Does poolcod show DeFi liquidity pools?
No. Poolcod analyzes centralized perpetual markets and does not represent tokens deposited in DeFi protocols.