Investors are eagerly anticipating the SEC's upcoming decision on spot Ethereum ETFs, which has sparked recent inflows into Ethereum. The approval of these ETFs is seen as a significant potential catalyst for ETH's price, mirroring the success seen with spot Bitcoin ETFs earlier this year.

The SEC is set to make decisions on two major applications this month, with VanEck's on May 23 and ArkInvest's on May 24. These decisions are crucial as the market is highly sensitive to regulatory movements. Currently, ETH is trading at $3,129, reflecting a 3% increase in the last 24 hours and a 7% rise over the past week. The asset experienced consistent inflows in the first quarter of the year, but faced a downturn due to market volatility and corrections. Many investors are betting that the approval of a spot Ethereum ETF will spark a significant price rally, leading to increased inflows.

Should the SEC reject the applications, most analysts predict that ETH will experience sideways trading rather than a sharp decline, due to the prevailing bullish sentiment as inflation eases. The total cryptocurrency market cap stands at $2.43 trillion, indicating broad-based inflows.

The likelihood of a spot Ethereum ETF being approved is estimated at 30-40%, according to a Coinbase analyst. Factors such as the upcoming U.S. elections play a role in this assessment. Analyst David Han suggested that the market may be underestimating the timing and potential impact of the approval. He pointed out that Ethereum doesn't face major supply-side pressures like token unlocks or miner sell-offs, which could support a positive price movement in the coming months.

Ethereum has seen a 33% increase year-to-date, which is modest compared to Bitcoin and Solana. Last year, Solana outperformed Ethereum, but many believe that an ETF approval could change the dynamic, driving Ethereum's price higher.

In summary, the SEC's decisions on the Ethereum ETF applications could be pivotal for ETH's market performance. While an approval is likely to trigger a price rally, a denial might lead to stable, sideways trading, supported by the overall positive market sentiment. Investors and stakeholders are watching closely, as the outcomes could shape Ethereum's trajectory in the months to come.