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.”
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The April FOMC minutes highlight why $ETH is inversely correlated to oil at the moment:– FOMC spoke of the need for “policy firming” if inflation persists >2%
– higher oil is pushing up inflation
– thus, higher oil = higher probability of Fed hikes https://t.co/tstNknIibY pic.twitter.com/rjaUKF96Cw— Thomas (Tom) Lee (not drummer) FundstratDirect.com (@fundstrat) May 21, 2026
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.
