- Bitcoin experienced a significant drop from approximately $107,000 to nearly $81,000 between November 11 and 21, 2023, creating fear in the crypto market.
- Despite the panic, on-chain evidence indicated that Bitcoin, not Ethereum, was the primary trigger for this sell-off.
- Traders speculated on various causes for the crash, but analytics revealed Ethereum displayed resilience compared to historical Bitcoin crashes.
From November 11 to November 21, Bitcoin collapsed from roughly $107,000 to nearly $81,000, triggering widespread fear throughout the crypto space. But while many traders assumed this meltdown signaled deeper structural weaknesses across the entire ecosystem, new on-chain evidence tells a very different story—one that shifts the blame away from Ethereum and directly toward Bitcoin itself.
Why Bitcoin’s Sudden Collapse Shocked Traders
No matter how long you’ve been in crypto, Bitcoin’s ability to plunge tens of thousands of dollars in a short window never loses its power to shock. The November crash was no exception. As BTC rapidly dropped nearly 25% in just 10 days, social media flooded with theories—from ETF outflows to miner capitulation to Ethereum supposedly dragging the market down. However, none of those explanations fit the on-chain reality. Blockchain analytics firms have now confirmed that Bitcoin was the source of the panic, not the victim of an ecosystem-wide meltdown. Ethereum, in fact, demonstrated surprising resilience during the correction—resilience that contrasts sharply with its historical performance during similar BTC crashes. To fully understand why this crash unfolded the way it did, we must step back and examine how each asset behaved across both spot and derivative markets, and why the two cryptocurrencies diverged so sharply during this downturn.
Two Sell-Offs, Two Very Different Stories
Research from XWIN Research Japan paints a clear picture of how Bitcoin and Ethereum reacted to the broader October–November pullback. Both assets declined—but not in the proportions markets have come to expect.
Bitcoin’s Chart: A Sharp Dive Into Panic Territory
From an indexed starting point on October 1, Bitcoin fell into the low-70 range by late November. This steep slide was mirrored by massive liquidations across futures markets. On November 21 alone, roughly $2 billion in leveraged Bitcoin positions were wiped out in 24 hours. Such a liquidation cascade strongly suggests that Bitcoin, not Ethereum, was the asset triggering the sell-off.
Ethereum’s Chart: A Much Softer Landing
Ethereum also fell, slipping into the high-60 range, but the extent of its decline was noticeably milder than past cycles would predict. Historically, when Bitcoin drops around 30%, Ethereum typically plunges 40–50%, owing to its higher volatility and lower market maturity. This time, however:
- The gap between BTC and ETH performance remained unusually narrow
- ETH avoided the exaggerated drop usually associated with BTC-led corrections
- On-chain fundamentals cushioned Ethereum’s fall
This deviation from historical patterns raised eyebrows—and on-chain data quickly offered the explanation.
Ethereum’s Supply Dynamics Acted as a Shock Absorber
Ethereum’s stability did not come from luck. It came from powerful structural changes that have transformed the asset since the Merge.
1. Massive ETH Locked in Staking Reduces Sell Pressure
With the transition to Proof of Stake, a significant portion of the ETH supply is now staked—effectively removed from active circulation. This means:
- Fewer coins available for panic selling
- Lower volatility during sharp downturns
- Stronger price stability when markets compress
In moments of market stress, this locked-up supply helps mitigate sudden crashes.
2. EIP-1559 Continues Burning ETH During High Network Activity
Since the introduction of EIP-1559, Ethereum’s fee-burning mechanism has permanently destroyed millions of coins. During busy periods, the burn rate accelerates—further reducing circulating supply. During the November turbulence:
- Rising activity → higher burn rate
- Fewer tokens available to hit the open market
- Reduced downward pressure compared to Bitcoin
This is the opposite of Bitcoin, whose supply schedule is fixed and whose available liquidity remains far higher during periods of fear.
The True Trigger of the Crash
While Ethereum’s supply structure offered protection, Bitcoin faced the full force of speculative leverage unwinding. On November 21, a clear liquidation wave ripped through BTC markets:
- Nearly $2B in long positions liquidated across exchanges
- BTC plunged toward $81,000, a level unseen in months
- The price briefly recovered above $84,000, before stabilizing around $88,000
By the time dust settled, BTC stood near $86,000, representing:
- 10% loss on the week
- 19% loss in two weeks
- 23% loss for the month
Ethereum’s losses—12% weekly and 29% monthly—were meaningful but still unusually restrained compared to its typical behavior in major Bitcoin downturns. Most importantly, there was no sign of a structural ETH collapse.
Bitcoin Is in a Mid-Cycle Reset, Not a Major Top
The MVRV ratio (Market Value vs. Realized Value) is one of Bitcoin’s most respected long-term valuation signals. Early in 2025, MVRV sat comfortably around 2.5—a level associated with bullish continuation phases. During the crash, the metric fell to roughly 1.5, a zone typically signaling:
- Market fear
- Mid-cycle corrections
- Opportunity zones rather than blow-off tops
This historical context suggests the drop was part of a broad market recalibration—not a terminal point in the cycle.
ETH Derivatives Flash Warnings
While Ethereum spot markets held steady, not everything is calm below the surface. According to CryptoOnchain, Ethereum’s estimated leverage ratio on Binance hit an all-time high of 0.562 as ETH dropped from $4,200 to $2,800. This means:
- Traders continued stacking long positions
- Open interest rose while price declined
- Liquidation risk is now elevated
High leverage combined with falling prices is a historically dangerous setup. If Ethereum retraces further, an aggressive liquidation cascade—similar to Bitcoin’s—could unfold. In other words, Ethereum survived this crash, but the derivatives market is quietly building a potential time bomb.
The “Zebra Market”: Extreme Swings
XWIN Research describes the current environment as a “Zebra Market,” marked by:
- Sharp alternating black-and-white price moves
- No consistent bull or bear structure
- Volatility without direction
This phenomenon is increasingly common in mid-cycle phases, where:
- Macroeconomic uncertainty persists
- On-chain indicators show mixed signals
- Traders over-leverage during range-bound movement
- Misleading narratives spread rapidly
In a Zebra Market, traditional indicators lose reliability—and on-chain data becomes essential to separating real market structure from noise.
The recent crypto crash sparked widespread confusion, but a detailed examination of on-chain data reveals a straightforward story: Bitcoin caused the panic, while Ethereum stayed surprisingly stable, supported by supply constraints and strong protocol fundamentals. Bitcoin’s dramatic plunge triggered a liquidation wave that dragged the market down, but Ethereum’s reduced circulating supply prevented deeper damage. Although ETH derivatives remain a risk, the asset itself showed resilience that contradicts claims of an Ethereum-led collapse. Ultimately, this downturn was a BTC-led mid-cycle flush, not a sign of long-term structural weakness in Ethereum. And as the market transitions into a more mature phase—with greater institutional involvement and increasingly complex on-chain dynamics—the ability to interpret these signals will become more important than ever.
Disclaimer: CryptopianNews shares this for learning and info only. It’s not meant to be financial or investment advice. Crypto markets change a lot and move quickly. Investing in them can be risky. You should always look into things yourself. Talk to a trained financial advisor before making any choices about investing.
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