Ethereum ($ETH) Prices remain under strong selling pressure, weighed down by rising oil prices and continued ETF outflows. $ETH After briefly falling near $1,800 due to heightened geopolitical tensions related to the Israeli-Iranian conflict, the price has recently fallen towards the key psychological support zone of $2,120.
Now, BitMine chairman and Fundstrat co-founder Thomas Lee believes that oil prices could be one of the biggest reasons for Ethereum’s recent downturn.
Tom Lee says oil prices are taking a hit $ETH
According to Lee, Ethereum currently has the strongest inverse correlation with oil prices in years. In other words, when the price of crude oil rises, $ETH It tends to become weaker.
Lee pointed to the latest Federal Reserve minutes, where officials warned that sustained inflation above 2% could force further monetary tightening or “tightening policy.”
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The April FOMC meeting minutes reveal the reason. $ETH Currently, it is inversely correlated with oil.– FOMC spoke of the need for “tougher policy” if inflation continues above 2%
– High oil prices are pushing up inflation
– Therefore, higher oil = more likely Fed rate hike https://t.co/tstNknIibY pic.twitter.com/rjaUKF96Cw— Thomas (Tom) Lee (not the drummer) FundstratDirect.com (@fundstrat) May 21, 2026
Rising oil prices often increase inflation because energy costs affect transportation, manufacturing, and consumer prices across the economy.
As inflation rises, markets begin to price in higher long-term interest rates and further tightening by the Federal Reserve. This environment typically puts pressure on risk assets such as cryptocurrencies, especially Ethereum, and Brent crude recently rose nearly 15% in the past month. at the same time, $ETH continues to trend downward.
ETF outflows and macro pressures add to the equation $ETH Weakness
Oil is not the only reason for Ethereum’s recent decline. Since May 11, the Spot Ethereum ETF has recorded daily outflows of $431.9 million, indicating weakness in near-term institutional demand.
Lee believes in flow. $ETH Much of the weakness is “short-term tactical noise” rather than a collapse in Ethereum’s long-term fundamentals.
Why Lee remains bullish on Ethereum
Despite the recent economic downturn, Lee still expects Ethereum to strengthen through 2026 due to two major themes: tokenization and AI-driven blockchain infrastructure.
Wall Street companies are increasingly exploring tokenized stocks, bonds, and real-world assets on blockchain networks, and Ethereum still dominates much of that ecosystem. Lee also highlighted the rise of “agent AI,” where autonomous AI systems could eventually rely heavily on blockchain-based payments and decentralized infrastructure.
These long-term trends continue to support Ethereum’s broad investment thesis, even as near-term macro conditions create downward price pressure.
