Madrid crashed to a 2-0 loss at Shakhtar on Tuesday in a result which leaves the LaLiga champions third in Group B and facing group-stage elimination heading into the final matchday.
Upstaged by Deportivo Alaves in LaLiga on Saturday, Madrid slumped to back-to-back defeats after succumbing to second-half strikes from Dentinho and Manor Solomon in Kiev.
Madrid have now conceded nine goals in the Champions League this season, their worst defensive total at this stage in the competition's history.
Zinedine Zidane's side also lost to Shakhtar at home and so trail Tuesday's opponents due to their head-to-head record, sitting a point behind pool leaders Borussia Monchengladbach but two ahead of Inter.
Reflecting on the reverse, midfielder Modric said: "It's difficult to explain after a first half where we played quite well and where we created a few chances, but we couldn't score the goals.
"In the second half, after they scored, everything changed and we started playing another game. We started getting nervous on the pitch. It's difficult to explain.
"It's a very difficult situation but it is what it is. There's still a game left and we're going to give everything to try to win that last game."
He added: "We lack the consistency that we've always had. We have one amazing game, two bad games, one good, two bad... it is what it is.
"We lack consistency and we have to improve as soon as possible."
Madrid ended a run of nine consecutive matches scoring at least one goal in the Champions League group stage (23 goals in total) – the longest run since another of 16 games between November 2015 and September 2018.
Meanwhile, all five of Shakhtar's goals in the competition this season have been scored against Zinedine Zidane's Madrid, who are seven points adrift of LaLiga leaders Real Sociedad.
Shakhtar became the fifth team to win their two Champions League group-stage clashes against Madrid in a single season, following CSKA Moscow in 2018-19, Juventus in 2008-09, Bayern Munich in the 1999-2000 second stage and Ajax in 1995-96.
"When our opponents go ahead, we're not right," Modric said. "We lose confidence and we don't play as we did before we conceded. We have to change that. We have to find solutions to improve.
"We created chances but we struggled to score. If we don't score, things get difficult for us. That's how it is, that's football. It's not maths and it's not always going to go as we'd like.
"We have to look at the positives, there's still a game to go and we're going to fight until the end."
Madrid can still guarantee their progress with a win when they host Gladbach on December 9 after travelling to Sevilla in LaLiga on Saturday.
"If you're always winning, you have more confidence, and when you lose, [not having confidence] is normal," said Toni Kroos. "As a team, you feel a lot better when you're winning and we have to get back to winning.
"We'll look at the situation in the group. All we have to do is win the last game, which is what we can do ourselves. If Gladbach don't win [against Inter, speaking ahead of the Nerazzurri's 3-2 win], we have it in our hands."