Bitcoin Panic, Not Ethereum Collapse: On-Chain Data Reveals

The October-November correction created a clear divergence between the two major cryptocurrencies that defied historical patterns. According to XWIN Research Japan analysis indexed from October 1, Bitcoin dropped into the low-70s by late November while Ethereum slid into the high-60s. Historically, a 30% pullback in Bitcoin has typically meant a 40-50% hit for Ethereum, but this time the gap remained unusually narrow, signaling that Ethereum held up better than usual even as fear spread across crypto markets.

The current price levels underscore this divergence. Bitcoin is trading around $86,000, down approximately 10% on the week, 19% over two weeks, and 23% on the month. Meanwhile, Ethereum sits near $2,800, about 12% lower on the week, 22% down over 14 days, and 29% lower monthly. While both assets suffered significant losses, Ethereum’s performance represents a notable departure from the outsized damage it typically experiences during Bitcoin-led corrections in previous market cycles.

The fundamental reason for Ethereum’s relative stability lies in on-chain supply dynamics that have fundamentally changed since the Merge. A growing share of ETH is now locked in staking protocols, effectively removing these tokens from immediate circulation. Simultaneously, EIP-1559 continues to remove coins from circulation during busy network periods through its burning mechanism. This combination means there are significantly fewer Ethereum tokens available to dump during market panics compared to previous cycles.

By contrast, Bitcoin experienced a clear liquidation spike on November 21 that matched reports of nearly $2 billion in wiped-out positions in a single day. The asset briefly slid toward $81,000 before bouncing back above $84,000 and later reclaiming levels near $88,000 over the weekend. This sharp movement and subsequent recovery highlighted the concentrated nature of the Bitcoin selling pressure, which didn’t translate into proportional Ethereum weakness.

Bitcoin’s MVRV ratio, a key on-chain valuation gauge that compares market value to realized value, has dropped from around 2.5 earlier in 2025 to roughly 1.5 during this selloff. This level has historically marked deep mid-cycle resets rather than final market tops, suggesting the current correction may represent a healthy consolidation within a broader bull market rather than the beginning of a prolonged downturn.

Despite the seemingly positive news for Ethereum’s spot market performance, other market technicians warn that the calmer ETH spot picture hides a dangerous build-up in derivatives. According to CryptoOnchain data, Ethereum’s estimated leverage ratio on Binance climbed to a record 0.562 even as the price fell from about $4,200 to $2,800. This indicates traders kept piling into leveraged long positions while the chart trended lower, leaving the market exposed to another wave of liquidations if Ethereum takes one more leg down.

Analysts are characterizing the current climate as a ‘Zebra Market,’ a term coined by XWIN Research to describe an environment defined by sharp, black-and-white price swings rather than sustained bull or bear trends. In such conditions, on-chain data becomes a critical tool for separating signal from noise, helping traders navigate the volatile landscape.

For now, the data frames this episode as a Bitcoin-led flush in a choppy mid-cycle rather than the start of an Ethereum breakdown. The combination of Bitcoin’s MVRV ratio reset, Ethereum’s supply constraints, and the record leverage in Ethereum derivatives paints a complex picture where traditional correlations may not hold, requiring investors to look beyond surface-level price movements to understand the underlying market dynamics.