Liquidation Zones

Introduction
The "Liquidation Zones" is a sophisticated TradingView indicator designed to assist cryptocurrency traders by highlighting potential liquidation levels for leveraged positions. It identifies price zones where liquidations are likely to occur for various leverage ratios—5x, 10x, 25x, 50x, and 100x—based on pivot points and volume analysis. This tool aims to help traders anticipate market movements driven by liquidations, offering insights into areas of risk or opportunity.

Key Features

• Multi-Leverage Visualization: Plots liquidation zones for five leverage levels (5x, 10x, 25x, 50x, 100x), with individual toggles to show or hide each level.
  
• Volume Filtering: Incorporates a customizable volume lookback period to ensure liquidation zones are displayed only during significant market activity.
  
• Pivot-Based Calculations: Uses pivot highs and lows to pinpoint key price levels, forming the foundation for liquidation price estimates.
  
• Customizable Appearance: Allows adjustment of line thickness and assigns unique colors to each leverage level for better visual distinction.
  
• Interactive Dashboard: Features a semi-transparent table displaying the status of each leverage level, using filled (◉) or empty (○) circles to indicate activity.
  

How It Works
The indicator combines pivot point detection, volume conditions, and leverage-specific calculations to plot liquidation zones on the chart. Here’s a breakdown of its operation:

• Pivot Points: Pivot highs and lows are calculated using ta.pivothigh and ta.pivotlow. The lookback and lookforward periods adjust dynamically based on the timeframe (e.g., 2 bars for daily/weekly/monthly, 3 bars otherwise), ensuring relevant support and resistance levels.
  
• Volume Conditions: The check_volume_conditions function analyzes volume over a user-defined lookback period (default: 40 bars). It compares the average volume to a mean volume
  
• threshold:
  5x Leverage: Volume > mean volume.
  10x Leverage: Volume ≥ 1.025 × mean volume.
  25x Leverage: Volume ≥ 1.05 × mean volume.
  50x Leverage: Volume ≥ 1.1 × mean volume.
  100x Leverage: Volume ≥ 1.2 × mean volume.
  These conditions filter out low-volume periods, focusing on impactful market activity.
  
• Liquidation Price Calculation:
  For each leverage level, liquidation prices are derived from pivot points and a risk percentage:
  Long Liquidations (from pivot lows): pivot_low / (1 + risk_percent)
  5x: 0.20, 10x: 0.10, 25x: 0.04, 50x: 0.02, 100x: 0.01
  Short Liquidations (from pivot highs): pivot_high * (1 + risk_percent)
  These prices represent where leveraged positions might be liquidated based on the leverage used.
  
• Plotting Liquidation Zones: When volume conditions are met and the toggle is enabled, horizontal lines are drawn from the pivot point to the current bar at the calculated liquidation prices. Each leverage level has a distinct color (e.g., cyan for 5x, pink for 100x), with adjustable line thickness (default: 3). Lines persist until the price crosses them or the maximum line count (500) is reached.
  
• Dashboard: A table on the chart’s middle-right displays each leverage level’s status. A filled circle (◉) appears when the volume condition is met and the level is active; an empty circle (○) indicates inactivity. The dashboard uses matching colors for clarity.
  
• Time Filter: The indicator activates only after a user-defined start time (default: January 1, 2023), with a gray background displayed if the chart is outside this period.
  

Conclusion
The "Liquidation Zones | Opus" indicator is a valuable tool for traders navigating leveraged markets. By plotting liquidation zones tied to pivot points and filtered by volume, it highlights potential areas of price instability. Its flexibility—through toggles, visual settings, and the dashboard—makes it suitable for diverse trading strategies, from scalping to swing trading. Traders can use it to enhance risk management or identify liquidation-driven opportunities.

Disclaimer
This indicator is provided for informational and educational purposes only and does not constitute financial advice. Trading involves risk, and users should perform their own analysis before making decisions. The creator is not liable for any financial outcomes resulting from its use.