The cryptocurrency market is eagerly anticipating the approval of the first spot Ethereum exchange-traded fund (ETF) in the United States, and one analyst believes this could lead to an immediate price rally for Ethereum (ETH).

Ethereum has been slipping after printing higher highs over the weekend, with the coin up roughly 5% from last week's lows but still trending below the crucial $3,700 resistance level. While ETH holders and traders remain optimistic, prices need to decisively close above this liquidation level to pave the way for more gains in the short to medium term.

The cause for optimism stems from the rapid decision by the U.S. Securities and Exchange Commission (SEC) to approve the spot Ethereum ETF. Following encouraging events in May, where the agency approved all 19b-4 forms, the product could go live and be accessible to investors and institutions within two weeks.

While there are concerns that the approval of the spot Ethereum ETF could lead to another wave of lower lows, as seen with the spot Bitcoin ETF in January, one analyst is stepping in to reassure holders. The analyst pointed out that the potential impact of Grayscale selling its Ethereum holdings (ETHE) once spot ETFs go live would be minimal, providing stability and confidence in the market.

This is due to the current state of Ethereum and the broader Ethereum ecosystem, which were not prepared for the SEC to fast-track the product's approval this year. In the case of Bitcoin, prices rose sharply from mid-October as the markets anticipated the spot ETF going live in January, but once launched, it became a "sell the news" event, briefly pushing down prices.

The analyst also highlighted that, unlike Grayscale's GBTC before the approval of spot ETFs, the discount in ETHE is narrow and within the 1-3% range. This means that traders who bought ETHE for the discount have had sufficient time to sell at near market price, and even once a spot Ethereum ETF goes live, selling pressure would be minimal.

While only time will tell whether ETH will soar or plunge in the next two weeks, the analyst believes that the clarity resulting from the spot Ethereum ETF's release could spark demand, allowing more institutions to gain exposure. K33 analysts predict the product will attract between $3.1 billion and $4.8 billion in net inflows within the first five months of trading.