Ethereum UTXO Payment Proposal Targets 99.8% Storage Reduction

Ethereum News

Ethereum (ETH) is debating a technical proposal that could reshape how the network settles payments. Researcher Toni Wahrstätter has floated adding native UTXO-style payments — unspent transaction output accounting, the same model Bitcoin uses — to the Ethereum base layer. The design would retain only a minimal spent marker in the live network state while pushing most payment data into historical blockchain records, cutting permanent storage requirements by as much as 99.8%. For a chain long wrestling with state bloat, the efficiency case is substantial. The proposal keeps the roadmap conversation — from privacy work like the Aztec Network to storage design — firmly in traders' view.

The idea drew an immediate rebuke from Cardano founder Charles Hoskinson, who accused Ethereum of borrowing from Cardano's Extended UTXO (EUTXO) model without acknowledgment. EUTXO extends the classic unspent-output model to support programmable spending conditions, and Hoskinson argues the Ethereum design leans on that groundwork. His remarks reignited a long-running rivalry between the two smart-contract platforms. For the broader altcoin market, the dispute underscores how contested design credit has become as competing layer-1 chains converge on similar scaling ideas. Traders largely shrugged, however; the technical merits matter less to the order book than the price levels ETH is defending this week.

Price action, meanwhile, remains hostage to geopolitics. ETH has held near $1,750 after renewed Middle East tensions triggered a risk-off move across markets, with sellers again defending the $1,800 resistance zone. U.S. airstrikes on Iranian military targets — following reports that Iran fired on civilian shipping near the Strait of Hormuz — pushed capital toward safe-haven assets and sapped crypto demand. Ethereum has failed to sustain multiple pushes above $1,800 over the past week, compressing into a tight consolidation range. On-chain and derivatives readings show heavy liquidation clusters stacked just overhead, a structure that has repeatedly capped recovery attempts and kept the near-term trend indecisive.

Regulatory uncertainty is compounding the caution. The U.S. Securities and Exchange Commission updated its 2026 rulemaking agenda on July 7 and 8 with three crypto-focused proposals covering safe harbors, broker-dealer capital requirements, and alternative trading systems. The framework signals a shift toward rule-based oversight rather than enforcement-led regulation, an approach the industry has long sought. Even so, large institutional allocators appear to be waiting on the fate of the CLARITY Act before committing fresh capital to digital assets. Until that legislative question resolves, the SEC filing offers direction without the certainty needed to unlock sidelined institutional flows into Ethereum and the wider market.

On-chain data captured a market split down the middle. As ETH probed toward the $1,500 area, roughly 100,000 unique addresses deposited Ethereum to a major exchange during the sell-off — among the highest deposit-address counts in three years and a classic signal of mounting spot-sell pressure. Yet withdrawals surged in tandem, indicating that while some holders capitulated, others treated the drop as an accumulation opportunity. With ETH still far below its all-time high, prediction markets echoed the indecision: bettors assigned a 75% probability to ETH reaching $2,000 in 2026 and a 68% chance it revisits $1,500, pricing both outcomes as live.

The panic proved short-lived. After the initial risk-off wave dragged Bitcoin (BTC) and Ethereum lower, both reversed within hours once headlines shifted, with President Trump stating that Iran had signaled it wanted a deal. Bitcoin bounced sharply off its lows while Ethereum held relatively steady, punishing traders who sold into the fear. The rebound came despite spot Bitcoin ETFs recording $84 million in net outflows, ending a three-day buying streak — a reminder that headline-driven whipsaws rarely dictate lasting direction. For Ethereum, the episode reinforced its recent tendency to absorb macro shocks with shallower drawdowns than in prior cycles.

Our reading of COINOTAG's proprietary 42-indicator composite S/R scoring engine frames the battle precisely. The engine rates the $1,831 resistance at 75/100, driven by the confluence of a high-volume node, the ATR upper band and the Ichimoku Senkou B cloud top, while $1,784 scores 63/100 on the SMA-50 and prior-day high. Support at $1,708 registers a strong 79/100 from Fibonacci 0.214 and a low-volume node. Derivatives lean cautiously long — funding at 0.0045%, open interest near $6.5 billion, and a 1.91 long/short ratio (65.6% long) — even as the Fear & Greed Index sits at 22, or Extreme Fear. A close below $1,708 invalidates the bullish case and opens $1,615; reclaiming $1,831 revives the $2,000 target.