Guus Hiddink has admitted Chelsea could become embroiled in a relegation battle with defeats to Everton and Arsenal in the next two games.
The champions of last season are 14th after 21 games, 12 points off their stated target of fourth place and just six clear of Sunderland, who occupy the final relegation place.
The Blues' predicament prompted Jose Mourinho's departure last month and Hiddink's appointment.
Chelsea are unbeaten in six games since Mourinho left, when they were one point off the drop zone, but the midweek draw with West Brom did little to ease concerns.
"It's reality," Hiddink said. "We were down when we started. We were one point off the relegation line, but now we have a little bit more room to breathe.
"We have two difficult games coming up - Everton, who have a very good away record - and then Arsenal.
"If you don't gather points there, you don't know what the others do. The Premier League can surprise you.
"There are 12 points difference to fourth place, which is Tottenham.
"We all like to look forward and to the top of the table, but also don't be unrealistic - you're six points off the line of relegation. That's also a fact.
"We have to work hard and be very concentrated and gather our points to step up.
"That's why it was a pity that in the 86th minute we got this draw against West Brom, which would've helped us a lot to go up."
The Chelsea interim manager says the uncertainty - including over who will replace Mourinho on a permanent basis this summer, plus the likely lack of Champions League football - makes transfer business difficult this month.
Asked if everything is on hold, the Dutchman said: "I think so. That's the reality of Chelsea nowadays."
Striker has been a position of focus in transfer speculation regarding Chelsea, with back-up for Diego Costa lacking.
Radamel Falcao (thigh) remains out, but when Loic Remy is fit Chelsea have no concerns up front, Hiddink says.
He added: "That's a little bit new for me. That's good.
"As long as this is happening (and Remy is fit) we are not very active in doing other things."
Costa was one of the main protagonists of a feisty 2-2 draw with West Brom on Wednesday and hit the tunnel in frustration when he left the field.
Hiddink insisted there was no damage.
He said: "I did a lot of things before I got into management. I was a plumber and a builder and I checked it out the day after. I didn't see anything.
"It was an expression of frustration, of not winning. No big deal."
Hiddink felt Claudio Yacob should have been sent off for two yellow cards and was so annoyed with the performance of referee Anthony Taylor that he expressed his concerns to fourth official Jon Moss. He was taken aback by the reply.
"I told him: 'This is one of the worst referees of the Premier League I have experienced,'" said Hiddink, who had a prior caretaker spell at Chelsea in 2009.
"He said to me 'you haven't seen me yet', which was a beautiful remark I think."
Costa walked a fine disciplinary line, too, after his booking for a challenge on Craig Gardner.
"He didn't go out of order," said Hiddink, who spoke to the striker on Friday about keeping his cool.
"He's playing on the edge, but the opponents are playing on the edge.
"There's always delicate provocations from left and the right. You see little things.
"It's mutual, but nevertheless he should control (himself)."
Eden Hazard remains out with a groin injury, but could return for the January 24 clash at Arsenal.
"He must have some tough training sessions in midweek; from (next) Tuesday to Thursday he must have intense training sessions," Hiddink said.
Hiddink's preference is to promote youth, rather than make signings.
Bertrand Traore and Christian Atsu, who had an unsuccessful loan at Bournemouth and a prior spell at Everton, but is now impressing in training, can also play at striker.
"If you have this academy, the investment in the academy and the facilities and the training programme one day it must produce," Hiddink said.
"If not it is not worth having an academy. If the management and board are having this policy you are unanimously in favour to do so.
"It is a risk, a bit, but you must give young British players or from abroad a chance.
"I'd prefer to do that in the winter period than bringing in an uncertain name."