Despite near-term weakness, Lee still sees tokenization and AI-related infrastructure as long-term drivers for ETH.
According to Bitmine Chairman Tom Lee, rising oil prices are the biggest reason Ethereum (ETH) has been struggling, and he says the inverse correlation between the two assets has hit the highest level ever recorded.
His observation has come at a time when ETH is trading near $2,100, down roughly 3% in 24 hours and 12% over the past month.
The Oil Connection
Lee laid out his thinking in a post on X on May 18, saying that as oil prices climbed over the past six weeks, ETH fell in step. “Rising oil prices is the biggest headwind,” he wrote, noting that the ETH-oil inverse correlation was at its “highest ever.” According to him, the implication is straightforward. Should oil reverse lower, ETH is likely to recover.
However, Lee was careful to frame this as short-term noise rather than a structural problem. The longer-term case, in his view, still rests on two things: tokenization of real-world assets and 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 his comments matters. ETH has been grinding lower for weeks, and the drop accelerated on May 18 after fresh geopolitical pressure came from US President Donald Trump, who warned Iran that its “clock is ticking” in a Truth Social post.
BTC slid to around $76,700 in response, its lowest level since early May, while over $660 million in leveraged positions were liquidated across the market, with ETH accounting for $256 million of that wipeout, according to data from CoinGlass.
The sell-off on Binance and OKX was particularly aggressive, with figures shared by analyst Amr Taha showing that taker sell volume on Binance crossed $1.1 billion as ETH pushed toward $2,100.
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A Market Cleared of Longs
What the liquidation data shows is a market that has been largely flushed of bullish leverage. According to market observer CW, only about $600 million in high-leverage ETH long positions remain, while short positions have reached $6.3 billion, more than ten times the size of the long side.
They also noted that a new CME gap has formed around $2,200 and that three unfilled CME gaps now sit between the current price and $3,200, removing a layer of downside technical risk.
Another trader, Crypto Ed, said both Bitcoin and Ethereum had entered what he described as “green box” support zones, though he still expected another leg lower before any sustained recovery. ETH hit a 10-month low against BTC over the weekend, with the ETH/BTC pair falling under 0.028, a level not seen since the middle of last year.