Liquidation Hunter
Detects large liquidation events in real-time, then watches for volume-confirmed bounces at those levels. When a cascade of liquidations clears overleveraged positions, the resulting vacuum often produces sharp reversals.
What is this scanner?
The Liquidation Hunter scanner detects large liquidation events in real-time and then identifies the bounce opportunity that typically follows. When a cascade of leveraged positions is forcibly closed, it creates a sudden supply vacuum — the sellers (liquidations) have been exhausted, and price tends to snap back sharply.
The scanner monitors exchange liquidation data and identifies when cumulative liquidation volume on a single asset exceeds $1M within a 15-minute window. This threshold — calibrated for crypto perpetuals — separates meaningful cascades from routine forced closures.
Origin & History
Liquidation hunting as a trading strategy emerged directly from the transparency of crypto exchange APIs, which began publishing liquidation data around 2019-2020. Unlike traditional markets where forced selling is hidden, crypto exchanges publish liquidation events in real-time.
The phenomenon of 'liquidity hunting' — where price moves specifically to trigger stop clusters and liquidations before reversing — is widely observed in crypto perpetuals and has been documented by researchers who track order book data. QSA's Liquidation Hunter doesn't hunt liquidations but identifies their aftermath as a potential trade opportunity.
Detection Criteria
Liquidation Volume Threshold
Cumulative liquidation volume on the asset exceeds $1M (for majors like BTC/ETH) or $250K (for mid-cap alts) within a single 15-minute window.
Directional Cascade
The liquidations are predominantly in one direction (>70% long or >70% short). One-sided cascades produce cleaner bounces than mixed liquidation events.
Price Context
The liquidation cascade occurs at or near a significant support/resistance level — these locations attract the highest liquidity and produce the strongest post-cascade bounces.
Volume Confirmation
A reversal volume surge of at least 1.5x average occurs within 3 candles of the liquidation peak, confirming new participants are entering on the other side.
Grading Breakdown
Large liquidation cascade at a major support level, one-directional, followed immediately by a volume surge reversal candle. High probability quick bounce.
Clear liquidation event with directional dominance and reversal candle, but not at a major key level. Strong but slightly lower probability.
Liquidation threshold exceeded but the cascade is mixed direction or the reversal volume hasn't confirmed yet. Monitor for confirmation.
Small liquidation event below threshold or at no significant price level. Noise — ignore.
Common Mistakes
Entering immediately during the liquidation cascade rather than waiting for it to complete. The cascade often lasts multiple candles — catching a falling knife during the cascade is high risk.
Holding liquidation bounce trades too long. These are quick mean-reversion trades, not trend entries. Take profits within 1-3 candles and move on.
Not checking whether the liquidated positions were a symptom of a broader market move. If the entire market is crashing, liquidation bounces have much shorter duration.
Ignoring the scale of the liquidation. A $500K liquidation event on BTC is meaningless noise. The $1M+ threshold on large-caps and $250K+ on alts is calibrated for meaningful signals.
How to Trade
Entry Context
Enter on the first bullish reversal candle after the liquidation cascade completes (volume begins to decrease on the cascade direction). This is a fast scalp setup — precision timing matters.
Risk Management
Stop below the liquidation extreme low (for long bounces). These trades are quick — if price makes a new low after your entry, the cascade is continuing. Risk no more than 1% due to the short-duration nature of these plays.
Target Framework
Target 1.5-2x ATR from entry as first target. Liquidation bounces typically recover 50-70% of the cascade move. Take profits at 1x ATR minimum and trail the rest.
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QuantScan AI scans 500+ crypto perpetuals in real-time, 24/7. Not financial advice. Past performance does not guarantee future results.