Tom Lee Links Ethereum Weakness to Rising Oil Prices

According to Bitmine Chairman Tom Lee, rising oil costs are the largest purpose Ethereum (ETH) has been struggling, and he says the inverse correlation between the 2 belongings has hit the best stage ever recorded.

His remark has come at a time when ETH is buying and selling close to $2,100, down roughly 3% in 24 hours and 12% over the previous month.

The Oil Connection

Lee laid out his considering in a submit on X on May 18, saying that as oil costs climbed over the previous six weeks, ETH fell in step. “Rising oil costs is the largest headwind,” he wrote, noting that the ETH-oil inverse correlation was at its “highest ever.” According to him, the implication is simple. Should oil reverse decrease, ETH is probably going to recuperate.

However, Lee was cautious to body this as short-term noise moderately than a structural drawback. The longer-term case, in his view, nonetheless rests on two issues: tokenization of real-world belongings and agentic AI.

“These structural drivers are in place,” he wrote. “Thus, we anticipate ETH costs to be stronger as we transfer by means of 2026.”

The timing of his feedback issues. ETH has been grinding decrease for weeks, and the drop accelerated on May 18 after recent geopolitical stress got here from US President Donald Trump, who warned Iran that its “clock is ticking” in a Truth Social submit.

BTC slid to round $76,700 in response, its lowest stage since early May, whereas over $660 million in leveraged positions have been liquidated throughout the market, with ETH accounting for $256 million of that wipeout, in accordance to knowledge from CoinGlass.

The sell-off on Binance and OKX was significantly aggressive, with figures shared by analyst Amr Taha showing that taker promote quantity on Binance crossed $1.1 billion as ETH pushed towards $2,100.

A Market Cleared of Longs

What the liquidation knowledge reveals is a market that has been largely flushed of bullish leverage. According to market observer CW, solely about $600 million in high-leverage ETH lengthy positions remain, whereas brief positions have reached $6.3 billion, greater than ten occasions the scale of the lengthy facet.

They additionally famous {that a} new CME hole has formed round $2,200 and that three unfilled CME gaps now sit between the present value and $3,200, eradicating a layer of draw back technical danger.

Another dealer, Crypto Ed, stated each Bitcoin and Ethereum had entered what he described as “inexperienced field” assist zones, although he nonetheless anticipated one other leg decrease earlier than any sustained restoration. ETH hit a 10-month low towards BTC over the weekend, with the ETH/BTC pair falling beneath 0.028, a stage not seen for the reason that center of final yr.

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