What risks could Ethereum short sellers face this week?

The last week of February brought another wave of declines, reinforcing hopes among short-term traders that altcoin prices could fall further. However, this attitude leads to increasing risks. If prices approach strong demand zones, they may make an unexpected recovery.

Several altcoins are showing a severe imbalance between potential long and short liquidity this week. Such conditions often create the environment for large liquid spills.

1. Ethereum (ETH)

The seven-day liquidity map for Ethereum (ETH) shows that many traders are allocating capital and leverage to short positions, betting on a continued decline at the end of the month.

As a result, cumulative potential flows on the short side now dominate. If ETH suddenly returns to $2,000 this week, short positions could face up to $2 billion in liquidation.

If ETH rises further to $2,160, short liquidity could reach $3.6 billion.

Short-term traders have reasons to justify bearish positions. BeinCrypto's latest report shows Vitalik Buterin reducing his holdings to over 8,800 ETH in February 2026. Meanwhile, Ethereum flows into Binance hit the highest level since November 2025.

However, several bullish indicators are also emerging, raising the possibility of an unexpected recovery.

ETH ETF flows have turned positive after four consecutive weeks of outflows. Additionally, data from CryptoQuant shows that flows into ETH storage addresses have reached the most active period in history over the past six months.

Given these dynamics, short sellers may need to reassess their skill levels to reduce the risk of sudden price reversals.

2. Binance Coin (BNB)

Like ETH, Binance Coin (BNB) has experienced constant selling pressure. A series of six red weekly candles with no clear signs of recovery encouraged traders to take major short positions.

However, this position increases the risk of liquidation if BNB recovers.

If BNB rises to $640 this week, potential short liquidity could reach $35 million. A further rally to $680 could push short liquidity above $60 million.

Why should short traders be careful?

First, BNB is approaching a long-term support trend established in 2024. Shorting near strong support levels often carries higher risk.

Second, data from On-Chain Mind, a crypto analytics account, indicates that BNB is currently 37 percent below its short-term owner-perceived valuation. Historically, this level has signaled meaningful price declines and has often been preceded by strong retracement moves.

“It's currently trading at about 37% of its short-term owner-realized valuation ratio, a level historically meaningful undervaluation. BNB has a history of sharp criticism from such zones,” On-Chain Mind reported.

Short sellers who have grown overconfident about BNB's fall may face significant losses if the rate changes.

3. Bitcoin Cash (BCH)

Bitcoin Cash stands out as one of the few altcoins that have not behaved in a broad crypto bear market.

However, short-term traders have been increasingly bullish on BCH in the last week of February. Their position pushed the potential short liquid well from the long side.

Data from Bitinfocharts shows that whales have been actively hoarding BCH in recent months. One whale address accumulated 400,000 BCH in two months, becoming the third largest owner of the network.