Bitmine Chairman Tom Lee says rising oil prices are the primary reason Ethereum (ETH) has been underperforming, and he notes the inverse correlation between oil and ETH has reached its highest level on record.
His comments come as ETH trades near $2,100 — down roughly 3% in the past 24 hours and about 12% over the past month.
The Oil Connection
Lee explained his view in a post on X on May 18, observing that as oil prices have climbed over the past six weeks, ETH has declined in tandem. “Rising oil prices is the biggest headwind,” he wrote, adding that the ETH-oil inverse correlation was at its “highest ever.” By his logic, if oil reverses and falls, ETH is likely to recover.
He stressed, however, that this is short-term noise rather than a structural flaw in Ethereum’s outlook. Long-term, Lee believes ETH’s prospects remain tied to two major trends: tokenization of real-world assets and the emergence of agentic AI.
“These structural drivers are in place,” he wrote. “Thus, we expect ETH prices to be stronger as we move through 2026.”
The timing of Lee’s note was notable. ETH has been sliding for weeks, and the decline accelerated on May 18 following renewed geopolitical tensions after U.S. President Donald Trump warned Iran that its “clock is ticking” via Truth Social. The news sent shockwaves through crypto markets and contributed to the downturn.
Bitcoin (BTC) fell to roughly $76,700 in the immediate reaction, its lowest level since early May. More than $660 million in leveraged positions were liquidated across the market, with ETH accounting for about $256 million of those losses, according to CoinGlass data.
Sell pressure was especially strong on Binance and OKX, where taker sell volume surged. Analyst Amr Taha highlighted that taker sell volume on Binance topped $1.1 billion as ETH approached $2,100, underscoring the intensity of the rout.
A Market Cleared of Longs
The liquidation data indicates the market has been largely purged of bullish leverage. Market observer CW estimated only about $600 million in high-leverage ETH long positions remain, while short positions have swelled to around $6.3 billion — more than ten times the size of the long side.
CW also pointed out a new CME gap formed near $2,200 and noted there are now three unfilled CME gaps between the current price and $3,200. These gaps change the technical landscape and remove one element of downside risk for traders watching for gap fills.
Another trader, Crypto Ed, said both Bitcoin and Ethereum have entered what he called “green box” support zones, though he cautioned that another downward leg could occur before any sustained recovery. Over the weekend, ETH reached a 10-month low against BTC, with the ETH/BTC pair dipping below 0.028 — a level not seen since midlast year.
In summary, short-term macro and geopolitical factors, notably rising oil prices and sudden risk-off events, have exerted strong downward pressure on ETH. But according to proponents like Tom Lee, underlying structural drivers such as real-world asset tokenization and advances in AI should support a stronger Ethereum price trajectory over the longer term.