Ethereum faces oil-driven pressure as risk assets weaken

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Ethereum faces oil-driven pressure

Highlights

Tom Lee said the inverse relationship between ETH and oil has reached an all-time high.
Brent rose toward $112 on May 18, while WTI reached $108.70.
ETH traded around $2,115, falling intraday to about $2,107.
Lee sees oil-driven pressure as a short-term factor, not a breakdown of the long-term thesis.

Oil weighs on risk assets

In a May 18 post, Lee wrote that rising oil prices had become the biggest short-term headwind for Ether. According to him, oil has risen recently while ETH has declined, pushing the inverse relationship between the two assets to a record level. He added that a correction in oil prices would support a recovery in Ethereum.

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The pressure intensified amid fresh tensions in the Middle East. Brent touched $112 on May 18, while WTI climbed to $108.70 after renewed concerns over supply. For the crypto market, this is a difficult backdrop: expensive energy strengthens inflation expectations and reduces demand for risk assets, including cryptocurrencies.

ETH declines, but oil is not the only factor

Against the backdrop of rising oil prices, Ethereum traded around $2,115, with an intraday low near $2,107. Market data also showed ETH near $2,116, down 3.2% over 24 hours and more than 9% over the week.

Oil, however, is not the only source of pressure. In recent days, the market has watched large ETH transfers to exchanges, outflows from spot ETFs and rising Ethereum reserves on trading platforms. One wallet linked to Garrett Jin reportedly transferred 577,896 ETH, worth about $1.35 billion, to Binance, while ETH reserves on exchanges rose from 14.36 million to 14.95 million ETH. U.S. spot Ethereum ETFs also recorded $103.6 million in net outflows on May 7.

The main bet for 2026

Lee described the current move as “short-term tactical noise” and stressed that Ethereum’s broader story is still tied to tokenization and agentic AI. In his view, Ethereum remains core infrastructure for tokenized funds, settlement systems, and future payments between AI agents.

That view marks a shift from Lee’s earlier assessment, when he described Ethereum as a strong wartime asset and pointed to its resilience during the Middle East conflict. Now the emphasis has changed: geopolitics, through oil, has become a threat to ETH’s price rather than a source of support. For investors, the question is straightforward: if oil stays near 2026 highs, Ethereum’s recovery could take longer; if the energy shock eases, the market may return to tokenization and AI as the main demand drivers.

It was earlier reported that Verus-Ethereum Bridge lost more than $11 million in a validation exploit.

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