Crypto perpetuals are leveraged, and leverage has a hard edge. When margin runs out the exchange closes the position at market, whether the holder wants that or not. Enough of those at the same price and the selling itself pushes spot into the next tranche of margin calls. That is a cascade.
Why it is computable
Liquidation prices are not a secret. They follow from entry price, leverage and the venue's maintenance margin. Aggregate open interest across venues, assume a distribution of leverage, and you get a map of where forced flow is likely to sit. That is the same category of information as a gamma wall: flow that has to happen, at a price you can name in advance.
It is an estimate, and it should always be labelled as one. No exchange publishes where liquidations sit - they publish the ones that already fired. Anything forward-looking is inference from open interest, and a tool that presents it as measurement is overstating what it knows.
Reading a cascade after the fact
The split matters more than the total. A day where longs were liquidated is a different market from one where shorts were, even at the same dollar figure. Long liquidations into falling price is forced selling, and it often exhausts quickly because the sellers are being removed rather than choosing to act. Short liquidations into rising price is a squeeze, and it tends to run further than the fundamentals justify.
Pair it with the open interest and price quadrant and you can usually tell which of those you are looking at within a candle or two.