Despite the short-term weakness, Lee still sees tokenization and AI-related infrastructure as long-term drivers for ETH.
Rising oil prices are the biggest reason why Ethereum (ETH) is struggling, according to Bitmine Chairman Tom Lee, who says the inverse correlation between the two assets has reached an all-time high.
His observations come at a time when ETH is trading around $2,100, down about 3% in 24 hours and 12% in the last month.
oil connection
Lee expressed his thoughts in a post on X on May 18th, stating that as oil prices have risen over the past six weeks, ETH has fallen along with them. “Rising oil prices are the biggest headwind,” he wrote, noting that the inverse correlation between ETH and oil is at an “all-time high.” According to him, the meaning is simple. If oil prices reverse, ETH is likely to recover.
However, Lee was careful to view this as short-term noise rather than a structural problem. In his view, the long-term issue still hinges on two things: tokenization of real-world assets and agentic AI.
“These structural factors are in place,” he wrote. “Therefore, we expect ETH prices to rise further into 2026.”
The timing of his comments is significant. ETH has been falling in recent weeks, with the decline accelerating on May 18th following new geopolitical pressures from US President Donald Trump. President Donald Trump warned in a post on Truth Social that Iran’s “clock is ticking.”
In response, BTC fell to around $76,700, its lowest level since early May, but more than $660 million in leveraged positions were liquidated across the market, with ETH accounting for $256 million of those liquidations, according to data from Coinglass.
The selling on Binance and OKX was particularly intense, with taker selling volume on Binance exceeding $1.1 billion as Ethereum climbed towards $2,100, according to numbers shared by analyst Amr Taha.
You may also like:
A market where longs have been wiped out
Liquidation data shows that bullish leverage has been largely wiped out of the market. According to market observer CW, long positions in high-leverage ETH remain at only about $600 million, while short positions have reached $6.3 billion, more than 10 times the long side.
He also pointed out that a new CME gap has formed around $2,200, and there are three unfilled CME gaps between the current price and $3,200, removing a layer of downside technical risk.
Another trader, Crypto Ed, said both Bitcoin and Ethereum have entered what he calls a “green box” support zone, but he still expects another drop before a sustained recovery. ETH hit a 10-month low against BTC over the weekend, with the ETH/BTC pair dropping below 0.028, the lowest level since mid-last year.
