Liq. Velocity

Measure how fast liquidations are happening — accelerating cascades versus fading pressure.

What is Liq. Velocity?

Liq. Velocity measures the rate of change in liquidation activity over time. Instead of just showing you how many liquidations have occurred, it tells you whether liquidation pressure is accelerating, steady, or decelerating. This distinction is critical for understanding whether a liquidation cascade is building toward its climax or winding down.

Think of it like speed versus position. Liquidation volume tells you how far the market has moved in terms of forced closures. Liquidation velocity tells you how fast it is moving and whether it is speeding up or slowing down. A large total liquidation volume with declining velocity suggests the cascade is exhausting. A moderate total with rapidly increasing velocity signals things are about to get intense.

This is a momentum indicator for liquidation pressure itself, helping you time entries and exits around liquidation-driven market events with greater precision.

Key Concepts

• Liquidation Velocity: The rate at which liquidations are occurring per unit of time — not the total, but the speed
• Acceleration: Velocity is increasing — liquidation pressure is building and the cascade is intensifying
• Deceleration: Velocity is decreasing — the cascade is losing steam and may be approaching exhaustion
• Velocity Spike: A sudden sharp increase in the rate of liquidations — often marks the beginning of a cascade event

How to Use Liq. Velocity

1. Open Liq. Velocity from the sidebar under Liquidation Tools
2. The chart displays liquidation velocity over time, showing acceleration and deceleration patterns
3. Monitor the current velocity reading relative to recent history
4. Watch for acceleration and deceleration phases to time your analysis of market conditions

What to Look For

• Bullish signals: Decelerating long liquidation velocity after a cascade suggests the selling pressure from forced closures is fading. A velocity spike in short liquidations that is still accelerating indicates an active short squeeze with room to run.
• Bearish signals: Accelerating long liquidation velocity is the most dangerous signal for longs — it means the cascade is building, not finishing. Sustained high velocity without deceleration signals that the liquidation event has more to go.
• Key patterns: The velocity curve typically follows a pattern during cascades: sharp spike, brief plateau, then deceleration. The transition from acceleration to deceleration often marks the climax of the move. Multiple velocity spikes in sequence (re-acceleration) indicate a deeper liquidation event.
• Combine with: Liquidation Analytics for Z-score context, Liq. Timing for cascade timing predictions, Live Liquidations for the real-time feed

Supported Exchanges

Tips

• Velocity is most useful during active liquidation events — in calm markets, readings will be flat and uninformative
• Use deceleration signals as potential entry points after cascades, but wait for confirmation from price action before acting
• Liq. Velocity does not predict when cascades will start — it helps you understand the phase of a cascade that is already underway