Ethereum faces billion dollar sell pressure as top crypto fund faces $862M high stakes liquidation risk

Key Highlights

• At the same time, the debt remains fixed, in a classic leveraged long structure. Trend has now sold at least 112,828 ETH across multiple transactions since early February.
• The position has declined from approximately 601,000 ETH to 488,172 ETH, a reduction of approximately 19%. At current prices near $2,150, the remaining position is valued at approximately $1.05 billion. Arkham earlier estimated the position was down roughly $562 million in unrealized losses when liquidation risk first surfaced around the $1,800 level.
• Currently, the position is down $862 million since the end of January. Trend Research holdings (Source: Arkham Intelligence)The data suggests multiple Aave positions with different liquidation thresholds, including one leg at approximately $1,558, indicating that the structure may be more complex than a single monolithic trigger. The repeated sales show a strategy of staying ahead of forced liquidation by voluntarily reducing exposure.
• Each sale repays debt, thereby reducing the total outstanding debt and improving the health factor, which is the ratio of collateral value to debt value that determines liquidation eligibility. However, each sale also locks in losses and reduces the remaining bet. Chart shows Trend Research reducing Ethereum holdings from 601,000 to 488,172 ETH through early February 2026 as ETH price declined from $2,350 to $2,175. How Aave liquidations actually workAave liquidations don't dump collateral onto the open market in one block trade. Instead, they transfer collateral to liquidators, who repay a portion of the borrower's debt and receive the seized ETH, along with a liquidation bonus.
• Liquidators then decide how and where to offload or hedge that ETH. The liquidation process begins when a position's health factor drops below 1.