Fundstrat co-founder Tom Lee identified rising oil prices as the primary catalyst for sustained selling pressure on Ether over the past three months. The inverse correlation between crude oil and ETH has reached record levels following the escalation of the US-Israeli conflict. Since the war began on Feb. 28, crude oil prices have surged 66%, climbing from $65 to over $100 per barrel. This trend intensified on Monday when WTI crude hit $108 and Brent crude reached $111, triggered by US President Donald Trump's warning on Truth Social regarding a deadline for Iran to negotiate access to the Strait of Hormuz. Data compiled by Woofun AI shows that Ether has traded sideways during this period of conflict, with the sell-off accelerating in the last week to drop nearly 10% and settle at $2,100, representing a 57% decline from its all-time high.

Lee characterized the current market dynamics as short-term tactical noise, predicting that a reversal in oil prices would facilitate an ETH recovery. He emphasized that the fundamental structural drivers for the asset remain robust, specifically citing tokenization and agentic AI as the key growth vectors for the coming years. Ethereum currently dominates the real-world asset tokenization sector, holding more than 60% market share when layer-2 networks are included. Major financial institutions, including BlackRock and JPMorgan, have recently launched tokenized funds on the Ethereum network, reinforcing its institutional utility. Woofun AI notes that the agentic AI narrative is gaining traction based on the premise that AI payment agents, unable to access traditional bank accounts, will utilize crypto tokens like ETH or stablecoins for transactions.

Despite these structural strengths, Ether faces significant headwinds from broader macroeconomic conditions. Its high correlation with risk assets means it suffers disproportionately during market sell-offs. Andri Fauzan Adziima, research lead at the Bitrue Research Institute, argued that oil prices are merely one component of a multi-factor pressure system affecting the asset. He highlighted that ETF outflows, rising exchange reserves, whale selling activity, and broader risk-off sentiment are concurrently driving the decline.

Furthermore, ETH's underperformance relative to Bitcoin has exacerbated the negative sentiment among investors. Woofun AI analysis suggests that while geopolitical tensions and oil volatility create immediate price suppression, the long-term trajectory depends on the interplay between these macro factors and the adoption of tokenization infrastructure through 2026.