Liquidity depth heatmaps visualize where capital is concentrated across price ranges. For LPs, these visualizations reveal where competition is fierce, where opportunities exist, and how to position for optimal fee capture.
What Heatmaps Show
- Liquidity concentration: Where most LP capital is deployed
- Fee competition: Dense areas mean more competition for fees
- Support/resistance: Heavy liquidity acts as price barriers
- Gaps and opportunities: Underserved ranges with less competition
Key Takeaways
- Heatmaps show liquidity distribution across price ranges
- Dense liquidity = more competition for fees
- Look for underserved ranges near current price
- Heavy liquidity walls often act as support/resistance
- Use tools like Revert Finance and DefiLlama for visualization