Analysts at QCP Capital have noted a significant lack of interest in the market, suggesting that the approval of a spot Ethereum ETF could potentially drive ETH back to recent highs.

Recent market data indicates a cautious sentiment among investors regarding the approval of spot Ethereum ETFs. Analysts caution that an unexpected approval could trigger a short squeeze, pushing ETH to its recent highs.

In a recent report, QCP Capital analysts highlighted that the ETH/BTC pair has declined to levels not seen since February 2021, implying that the market is anticipating a rejection. Despite this, Ethereum has shown strong support at the $2,900 level, defending this price multiple times throughout the year.

Given the current market conditions, the approval of a spot Ethereum ETF could be a surprise, potentially causing a short squeeze that could easily drive ETH back to recent highs, according to QCP Capital. Since January, Ethereum has climbed as high as $4,066, although it is still below its all-time high of $4,891 set in November 2021. In this context, an ETF approval could act as a significant catalyst for bullish momentum, possibly pushing ETH back toward these levels.

“An unexpected approval could trigger a short squeeze taking us easily back to recent highs,” QCP Capital analysts noted.

So far, there are no clear indications from the U.S. Securities and Exchange Commission (SEC) suggesting an imminent approval of a spot ETH ETF. Bloomberg analyst Eric Balchunas mentioned that the SEC might be considering Ethereum as a security in their decision-making process, indicating that the chances of approval are low.

However, David Han, an analyst at a leading crypto exchange, believes that the market might be underestimating the timing and odds of a potential approval. He added that Ethereum, the second-largest cryptocurrency by market value, might still have the potential to surprise to the upside in the coming months.

The SEC is expected to make a decision on VanEck’s application for a spot Ethereum ETF on May 23.

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