Bitcoin price dropped to levels on Thursday that placed it below the “Fire Sale!” band on the Bitcoin Rainbow Chart — a depth not reached since the catastrophic FTX exchange collapse in November 2022 — as the Fear and Greed Index registered a reading of 12 out of 100, deep in “Extreme Fear” territory.
Bitcoin price opened today near $63,500 after sliding below $62,000 last night. That puts BTC below even the most discounted valuation band on the Bitcoin Rainbow Chart — a level the model historically flags as a rare and extreme buying signal.
The Bitcoin Rainbow Chart is somewhat of a logarithmic growth curve overlaid with color-coded sentiment bands. The deepest band — labeled “Basically a Fire Sale!” — represents the lowest tier of the model’s projected fair value range. When Bitcoin trades beneath it, the asset sits outside the historical channel that has contained BTC’s long-term price behavior.
The last confirmed breach of the “Fire Sale!” floor occurred during the FTX exchange collapse in November 2022, when Sam Bankman-Fried’s crypto empire imploded and BTC cratered under forced selling pressure across the market. That event remains one of the most severe liquidity crises in crypto history.
Per Bitcoin Magazine Pro data from March 2026, Bitcoin price had already begun testing below the “Fire Sale!” zone — described at the time as “its first drop into this area since the FTX-induced crash”.
The renewed descent on June 4 deepens that breach, with the coin shedding ground for the second consecutive week.
Bitcoin price and market in ‘Extreme Fear’
The Fear and Greed Index, which runs on a scale of 0 to 100, registered 12 on Thursday — placing the market squarely in “Extreme Fear”. The index aggregates volatility, market momentum, social sentiment, and derivatives data into a single score.
A reading below 25 signals extreme fear, a condition that, by the index’s own framework, has historically preceded price recovery periods.
February 2026 saw the index touch an all-time low of 5, driven by a 52% drawdown from Bitcoin price’s peak of $126,000. Thursday’s reading of 12 sits just above that nadir, as Bitcoin price continues its slide from cycle highs.
On X today, Strategy’s Michael Saylor argued the sell-off reflects institutional capital rotating into AI infrastructure rather than a deterioration in Bitcoin’s fundamentals. The decline may have been compounded by concerns over Strategy selling 32 BTC to fund preferred-share dividends — its first bitcoin sale since 2022 — despite the company recently reducing debt by repurchasing $1.5 billion of convertible notes at a discount.