Potential Selling Pressure of 320,000 ETH: Focusing on the Liquidation Risks of High-Leverage Positions in Trend Research and Market Warnings

Large institutions operating with high leverage in the crypto market are like an iceberg game hidden beneath the surface. On-chain data shows that the Ethereum holdings of well-known institution Trend Research are facing a severe test, with an average liquidation price of around $1,640, while the current Ethereum price is approximately $1,915.77. The buffer between the two is narrowing.

If the institution chooses to fully deleverage, it may need to liquidate up to 320,000 ETH in the current market environment. This potential sell-off scale could trigger a chain reaction during a market downturn, intensifying price volatility.

Overview of High-Leverage Positions in Institutions

Trend Research’s Ethereum holdings reveal the massive scale of institutional leverage in the crypto market. According to the latest on-chain data, the institution currently holds about 463,000 ETH, worth approximately $998 million. Earlier data shows its peak holdings reached 661,000 ETH, with an average across multiple sources of about 618,000 ETH.

The average purchase cost for these ETH is around $3,180, resulting in significant unrealized losses in the current market environment. As collateral for these holdings, Trend Research has outstanding loans on platforms like Aave totaling between $625 million and $941 million, forming highly leveraged positions.

Liquidation Price: The Achilles’ Heel of High-Leverage Positions

In decentralized finance, the liquidation price is the lifeline of leveraged positions. When collateral value drops below a certain point, protocols like Aave automatically sell collateral assets to repay loans. For Trend Research, the price range of $1,574.6 to $1,681.49 is the critical red line. If Ethereum’s price falls below this range, it could trigger automatic liquidation of hundreds of thousands of ETH, creating enormous market sell pressure.

This mechanism was demonstrated in late January when Ethereum briefly dipped to $2,805. Trend Research quickly withdrew 36.39 million USDT from exchanges into Aave as additional margin to avoid liquidation risk. This emergency action highlights the fragility of high-leverage positions amid market volatility. Subsequently, the institution borrowed an additional 80 million USDC from Aave to further manage its risk exposure.

Chain Reaction of Liquidations: From Archegos to the Crypto Market

High-leverage institutions face liquidation risks not unique to crypto. The 2021 Archegos “biggest margin call in history” provides a traditional finance perspective on institutional leverage risks.

Unlike the automatic liquidation mechanisms in crypto, traditional investment banks gave Archegos weeks to raise additional margin, a privilege not available to retail investors. When Archegos ultimately failed to meet margin calls, its positions were forcibly liquidated, causing Credit Suisse and others to suffer losses of up to $5.5 billion. This event demonstrated how large institutional high-leverage positions can trigger systemic risks and chain reactions.

Crypto markets differ in their automated liquidation mechanisms and higher transparency. On-chain data makes institutions like Trend Research’s positions and liquidation prices nearly real-time visible. This transparency is a double-edged sword: it allows market participants to better assess risks but may also trigger preemptive selling when prices approach liquidation zones, exacerbating market volatility.

Current Market Vulnerability and Liquidity Challenges

Crypto markets faced multiple pressures in early 2026. In early February, the crypto market experienced intense turbulence, with Bitcoin briefly dropping below $60,000, triggering forced liquidations of about $2.7 billion in high-leverage positions within 24 hours. Meanwhile, the Crypto Fear & Greed Index plummeted to 9, the lowest since June 2022, turning market sentiment into extreme panic.

Traditional markets also show similar fragility. Morgan Stanley warned of a “collapse-like” reversal in US stocks driven by momentum trading, with rebalancing of leveraged ETFs adding approximately $18 billion of selling pressure. More concerning is the apparent absence of retail buyers who could provide buffer during declines, leading to insufficient marginal support. This phenomenon is also present in crypto, intensifying price swings during large institutional deleveraging.

A joint report by Glassnode and Coinbase Institutional for Q1 2026 states that the digital asset market has become structurally healthier, with lower leverage and more cautious risk expression. However, open interest in BTC options now exceeds perpetual futures, with positions increasingly concentrated in protective structures, indicating market participants are hedging against further declines.

Trading Perspective: Market Data and Risk Monitoring

As of February 6, 2026, according to Gate data, Ethereum (ETH) is trading at $1,915.77, with a 24-hour trading volume of $937.38M and a market cap of $253.2B. Notably, the average liquidation price range of Trend Research ($1,574.6–$1,681.49) offers limited buffer against current market prices.

At the same time, Bitcoin (BTC) is priced at $64,994.1, up 3.31% in 24 hours, with a market cap of $1.56 trillion and a market share of 56.80%. Market forecasts suggest that by 2031, the average price of Bitcoin could reach $163,467.6, while Ethereum might hit $5,319.08.

For traders and investors, monitoring large institutional on-chain activity can provide valuable market signals. For example, when prices approach critical liquidation zones, observe whether there are margin calls or active reductions in holdings. Additionally, keeping an eye on overall market leverage levels is crucial. According to Glassnode data, excluding stablecoins, systemic leverage has fallen to about 3% of the total crypto market cap, significantly lower than the leverage-dense environments of early 2024 and 2025.

Market participants should also pay attention to regulatory developments. Seven associations, including the China Internet Finance Association, have jointly issued risk alerts, clarifying that virtual currencies are not issued by monetary authorities, lack legal tender status, and carry associated risks.

The transparency of crypto markets acts like a double-edged sword, exposing institutions like Trend Research’s 618,000 ETH holdings and $1,640 average liquidation price to the public eye. These data points not only reveal individual institutional risk but also reflect the fragile balance of leverage adjustment across the entire market. As Ethereum’s price oscillates around $1,915, just a step away from triggering liquidations, the market is holding its breath, awaiting the next move.

As the aftermath of Archegos’ blowup in traditional markets lingers, the de-leveraging narrative in crypto markets has quietly begun. This liquidation game, dominated by algorithms and smart contracts, leaves no room for the “weeks-long grace period” typical of traditional finance.