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Ethereum is getting hammered. Bitmine Chairman Tom Lee made the case on May 18 that rising oil prices are directly dragging ETH down, calling the inverse relationship between oil and Ethereum the highest it’s ever been. ETH was trading near $2,100 at the time — down 3% in 24 hours and 12% over the past month.
Lee’s read is pretty straightforward: over the past six weeks, Ethereum’s price has basically mirrored oil’s climb, moving in the opposite direction as crude pushed higher. His view is that if oil pulls back, ETH could recover. But he’s not panicking. He called the current weakness short-term noise, not a structural problem, and said he’s still bullish on Ethereum’s longer-term story — pointing to real-world asset tokenization and advances in agentic AI as the drivers that matter most. The correlation with oil, in his view, is a distraction.
That’s easy to say. Harder to believe when the charts look like this.
Geopolitical Shock Hits at the Worst Time
The sell-off got uglier after geopolitical tensions flared, specifically following a statement from US President Donald Trump directed at Iran. Markets didn’t like it. Bitcoin dropped to $76,700, its lowest level in weeks. The broader crypto market got hit with over $660 million in liquidated leveraged positions — Ethereum alone accounted for $256 million of that wipeout.
The worst of it played out on Binance and OKX, where aggressive taker selling pushed ETH toward $2,100. On Binance, taker sell volume alone surpassed $1.1 billion as Ethereum approached that level. That’s not a slow bleed. That’s traders running for the exit at the same time.
ETH/BTC dropped below 0.028 during the chaos. A ten-month low. The last time the pair sat at this level was the middle of last year, and it’s a number that stings for anyone who’s been holding ETH hoping it would eventually outperform Bitcoin. It hasn’t. Not lately.
Short Positions Dwarf Longs, CME Gaps Add Risk
The leverage picture is ugly. Market observer CW flagged that short positions on Ethereum now exceed $6.3 billion, while only around $600 million in high-leverage long positions remain. That’s not a balanced market. That’s a market leaning heavily in one direction, and it’s not up.
The liquidation wave cleared out a lot of the bullish leverage that had been sitting in the market. What’s left is a landscape dominated by shorts and a lot of caution. Traders who were long got flushed out. The ones still standing are mostly watching and waiting — or actively betting on more downside.
Technically, it’s not clean either. A new CME gap formed around $2,200. And there are two other unfilled CME gaps sitting between current prices and $3,200. Gaps like these tend to get filled eventually, but “eventually” can mean weeks or months of sideways or lower prices first. Three unfilled gaps between here and $3,200 is a real technical overhang.
Trader Crypto Ed spotted that both Bitcoin and Ethereum have entered what he calls “green box” support zones. That sounds encouraging. But he’s still expecting further price declines before any real recovery kicks in. So even the support zone crowd isn’t exactly pounding the table.
The oil correlation angle is worth sitting with for a second. It’s not a typical driver for crypto prices — most market watchers focus on Fed policy, risk appetite, Bitcoin dominance, or on-chain data. The idea that crude oil movements are now the clearest short-term signal for ETH is kind of strange, and probably says something about the macro environment right now. Energy prices feed into inflation expectations, which feed into rate expectations, which feed into risk assets broadly. Ethereum isn’t immune to that chain.
It’s also worth noting that Ethereum has been underperforming Bitcoin for a while now, and the ETH/BTC drop below 0.028 isn’t just a number — it’s a psychological level that’s pushed some longer-term ETH holders into uncomfortable territory. The question of whether ETH can reclaim ground against Bitcoin doesn’t have a clear answer right now.
Lee’s longer-term thesis — real-world asset tokenization, agentic AI — hasn’t changed. Those are real narratives with real development behind them. But narratives don’t pay the bills when leverage is getting liquidated and oil prices are running.
The market stays cautious. Shorts are stacked. CME gaps are open. And Ethereum is sitting near $2,100 with $256 million already gone from leveraged longs in a single session.
Frequently Asked Questions
What connection did Tom Lee draw between oil prices and Ethereum?
Tom Lee, Bitmine Chairman, said on May 18 that Ethereum’s price has moved inversely with oil prices over the past six weeks, calling it the highest inverse correlation between the two assets ever recorded.
How much was liquidated from Ethereum positions during the sell-off?
Ethereum accounted for $256 million of the over $660 million in total leveraged liquidations triggered during the market downturn, with taker sell volume on Binance alone exceeding $1.1 billion.
