Ethereum (ETH) is undergoing a downturn marked by macroeconomic factors and international geopolitical tensions. Fundstrat co-founder Tom Lee thinks so, saying one of the main factors impacting Fundstrat’s performance is the sharp rise in oil prices recorded in recent weeks.
The second-largest cryptocurrency on the market fell to an intraday low of $2,097 on Sunday, its lowest since April 7. ETH managed to stabilize around $2,116has accumulated a daily decline of nearly 2.9%.
Through a post on X, Lee explained that the recent movements of crude oil and Ethereum are showing an increasingly pronounced inverse correlation. According to the analyst, while oil prices continue to rise due to geopolitical uncertainty in the Middle East, ETH maintains a persistent bearish trend within the market.
The executive asserted that oil growth will be the main hurdle for Ethereum in the short term. In his opinion, rising energy prices and increased risk aversion will ultimately particularly impact more volatile assets such as cryptocurrencies.
Rising oil prices coincide with renewed tensions related to the Strait of Hormuzone of the most important shipping routes for global energy trade. Possible disruptions to international supplies have caused barrel prices to rise rapidly in recent weeks. Brent crude oil traded near $111 a barrel on Monday, up about 16.4% in the past month.
For Lee, this background ultimately had a direct impact on investor appetite for Ethereum. As shown, Oil’s progress in recent weeks has coincided with a gradual decline in ETH pricesthe inverse relationship between both assets is strengthened.
However, the executive believes that an eventual correction in oil prices could create room for Ethereum to recover. Despite the recent weakness, he described the current scenario as “short-term tactical noise” and maintained that ETH’s structural fundamentals remain strong.
Despite the short-term bearish scenario, Lee maintains that Ethereum’s structural theory remains sound. Analysts believe the most important story for the network continues to be the tokenization of real-world assets and the growth of agentic artificial intelligence. In this sense, Predicts ETH could reach $9,000-$12,000 range towards the end of 2026Indeed, it is supported by the growth of institutional tokenization and the introduction of networks linked to artificial intelligence. }
Analysts suggest other factors
Other analysts and financial firms in the space believe that the recent pressure on Ethereum is in response to a broader combination of factors beyond rising oil prices. Reports from organizations such as Citigroup and Standard Chartered Warning of declining appetite among institutional investors for ETH, This was accompanied by capital outflows from Etherlink ETFs and increased market preference for Bitcoin. In addition to this, a macroeconomic environment characterized by increasing ETH reserves on exchanges, selling by large investors, and increased risk aversion are factors that continue to limit the performance of the second-largest cryptocurrency on the market.
Looking ahead, Ethereum’s outlook remains bullish in the long term, but there are significant differences in the short and medium term. In a recent Reuters report, Citi lowers ETH 12-month target to $3,175; The bullish scenario is $4,488 and the bearish scenario is $1,198. The company claimed that while Ethereum anticipates support with stablecoins and tokenization, it is highly sensitive to user activity and institutional flows.
Meanwhile, Standard Chartered remained more optimistic, stating that 2026 will be the “year of Ethereum.” Projected to reach $25,000 by the end of 2028. The bank justified this claim by citing increased network usage, stablecoin growth, and institutional adoption.
What is certain is that recent developments in the currency reflect how the crypto market remains exposed to both macroeconomic factors and international geopolitical tensions, despite sustained long-term positive expectations for the ecosystem.
