Key Takeaways
Is Ethereum facing both technical stress and institutional risk?
Modexp inefficiency and $135.7M ETF outflows mean Ethereum is getting hit from both sides.
Could ETH retest lower levels if this continues?
If demand doesn’t return fast, $3.3K-$3.35K will become a realistic downside target.
Ethereum [ETH] is facing a double hit this week, and the timing could not be worse!
Co-founder Vitalik Buterin admitted in an X post that the current modexp precompile is hurting ZK-proof efficiency. He added that it’s slowing down a feature that is meant to drive ETH’s next big scaling upgrade.
At the same time, institutions are quietly walking out the door – ETH ETFs saw $135.7M in net outflows, with BlackRock alone unloading $81.7M. If both the tech layer and the capital layer turn against ETH in the same week, is the floor about to give way?
A problem that is impossible to ignore
According to Buterin, modexp can be “50x worse than average blocks” for ZK-EVM proving. This is confirmation that the inefficiency is now too big to ignore.
In his own words, he even said he “bows his head in shame” for inventing it.
The community response was simple – This is a waste of engineering time, and fixing modexp matters more than squeezing tiny efficiency gains elsewhere.
As one user put it,
“Makes sense. The opportunity cost of optimizing obscure opcodes is huge compared to improving core scalability layers.”
This matters because if ZK-proving stays slow, ETH scaling stalls.
And, that risk is suddenly front and center.
To make matters worse…
Yesterday alone, ETH ETFs saw $135.7 million in outflows, with BlackRock dumping $81.7 million on its own. That’s institutional capital actively reducing exposure.
And, the scale matters here – This is one of ETH’s sharpest single-day outflow clusters since launch. If big allocators continue to pull liquidity at this pace, Ethereum will struggle to find a floor.
This turns the modexp debate into a capital flight problem.
ETH breaks below key structure
At press time, Ethereum’s price was trading near $3,480 after a heavy two-day sell-off candle cluster that erased most of last week’s bounce.
The RSI suggested that momentum has been weak, but not yet fully oversold. The OBV continued to slide lower too. So, volume has been flowing out, not in.
Structurally, this means ETH has failed to defend its short-term support.
Unless demand returns quickly, there’s a clear risk of a deeper fall (potentially toward the $3.3K-$3.35K pocket), before any real upside attempt could form.