Do Liquidation Levels Reverse Price? A Backtest of 124k Sweeps

Updated: 2026-10-22 · Türkçe

Liquidation maps show estimated prices where leveraged positions get liquidated, and it is often said that price sweeps these clusters and reverses. We measured this on 2 years of 41 Binance crypto perpetuals, 1-hour and 4-hour charts, 124,159 sweeps in total. Short answer: a sweep alone is not a better reversal signal than a random candle — but as a filter on another rule it helps.

How estimated liquidation prices are computed

Real position data is not public; maps are estimates. Approach: assume 10x, 25x, 50x and 100x positions opened at confirmed swing highs/lows (5 bars each side). Long ≈ entry × (1 − 1/leverage + maintenance margin), short ≈ entry × (1 + 1/leverage − maintenance margin), maintenance margin 0.5%. A level touched by price counts as swept.

Did price reverse after sweeps?

After each sweep we checked whether price first moved 1 ATR back or 1 ATR further, and applied the same measure to random candles.

MeasureAfter sweepRandom candle
1 ATR reversal first60%57–59%
Best filtered trade rule (profit factor)1.030.97

What we learned

The reversal rate beats random by only 1–3 points and could not be turned into a profitable rule after fees. Reclaims, 1–2R targets, next-cluster targets, continuation trades, magnet direction and CVD all failed to beat random entries meaningfully.

Popular figures like "68% bounce" usually come from the measurement itself: random candles score similarly. A rate means little without a random baseline.

As a filter: with Fibonacci

We split the 4-hour Fibonacci 0.382 rule's trades (446 trades on 41 perps in this test) by the liquidation balance at entry. With more long liquidations below price (negative score), results improved at every threshold:

Liquidation score conditionProfit factor
None (all Fib trades)1.81
< 01.86
< −0.11.97
< −0.32.02
< −0.52.29

Conclusion

Our numbers support using liquidation levels as a MAP and a filter, not as a stand-alone entry signal. The combined rule showed no edge on daily or hourly charts. Pairs chosen by today's volume; funding and slippage not included. Not investment advice.

Free tools

Liquidation price calculator →Open the chart (Indicators → Liquidation Magnet) →Fibonacci strategy backtest →Funding schedule →

Frequently asked questions

Do liquidation levels reverse price?

In our measurement price reversed after 60% of sweeps versus 57–59% on random candles — no meaningful stand-alone trading edge.

Is a liquidation heatmap real data?

No; exchanges don't publish positions. Maps are estimates from price structure and assumed leverage.

How can liquidation data be used?

As a filter: on the 4-hour Fibonacci rule, requiring heavier long liquidations below price raised the profit factor from 1.81 to 2.02–2.29.

How do I see this on a chart?

On the ByStock chart, Indicators → "🧲 Liquidation Magnet" draws the clusters; "🎯 Magnet Fib" combines both rules with entry, stop and target. Free.

More guides