Ethereum (ETH) prices continue to face heavy selling pressure as rising oil prices, and continued ETF outflows weigh in. ETH recently slipped toward the critical $2,120 psychological support zone after briefly falling near $1,800 during rising geopolitical tensions tied to the Israel-Iran conflict.
Now, BitMine Chairman and Fundstrat co-founder Thomas Lee believes oil prices may be one of the biggest reasons behind Ethereum’s recent weakness.
Tom Lee Says Oil Prices Are Hurting ETH
According to Lee, Ethereum currently has one of its strongest inverse correlations with oil prices in years. That means when oil prices rise sharply, ETH tends to weaken.
Lee pointed to the latest Federal Reserve meeting minutes, where officials warned that persistent inflation above 2% could force additional monetary tightening or “policy firming.”
Higher oil prices often increase inflation because energy costs affect transportation, manufacturing, and consumer prices across the economy.
As inflation rises, markets begin pricing in higher-for-longer interest rates or even additional Federal Reserve tightening. That environment usually pressures risk assets like crypto, especially Ethereum.Brent crude oil recently surged nearly 15% over the past month. At the same time, ETH has continued trending lower.
ETF Outflows and Macro Pressure Add to ETH Weakness
Ethereum’s recent decline is not being driven by oil alone. Since 11 May spot Ethereum ETFs have recorded consecutive days of outflows, making an outflow of $431.9 million, signaling weaker short-term institutional demand.
Lee believes the current ETH weakness is mostly “short-term tactical noise” rather than a collapse in Ethereum’s long-term fundamentals.
Why Lee Still Remains Bullish on Ethereum
Despite the recent downturn, Lee still expects Ethereum to strengthen through 2026 because of two major themes: tokenization and AI-driven blockchain infrastructure.
Wall Street firms are increasingly exploring tokenized stocks, bonds, and real-world assets on blockchain networks, with Ethereum still dominating much of that ecosystem.Lee also highlighted the rise of “agentic AI,” where autonomous AI systems may eventually rely heavily on blockchain-based settlement and decentralized infrastructure.
Those long-term trends continue supporting Ethereum’s broader investment thesis even while short-term macro conditions pressure prices lower.
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