Bitcoin Price Plunges Below ‘Fire Sale’ Territory As Fear Index Reads 12 — Echoing The FTX Crash
Bitcoin price took a significant dip on Thursday, falling to levels that haven’t been seen since the FTX exchange collapse in November 2022. The Fear and Greed Index hit a low of 12 out of 100, indicating that the market is in a state of “Extreme Fear.”
Opening near $63,500 and dropping below $62,000, Bitcoin is now below the lowest valuation band on the Bitcoin Rainbow Chart, known as the “Fire Sale!” zone. This level is historically seen as a rare and extreme buying signal for the cryptocurrency.
The Bitcoin Rainbow Chart is a logarithmic growth curve with color-coded sentiment bands. Trading below the “Fire Sale!” band means that Bitcoin is outside of its usual price behavior channel. The last time this happened was during the FTX exchange collapse, which caused a severe liquidity crisis in the crypto market.
According to data from Bitcoin Magazine Pro in March 2026, Bitcoin had already started testing below the “Fire Sale!” zone. The recent drop on June 4 has deepened this breach, with Bitcoin losing ground for the second week in a row.
The Fear and Greed Index, which measures market sentiment on a scale of 0 to 100, is currently at 12, indicating extreme fear in the market. A reading below 25 typically precedes price recovery periods. In February 2026, the index hit an all-time low of 5 during a 52% drawdown from Bitcoin’s peak price of $126,000.
Some experts, like Strategy’s Michael Saylor, believe that the sell-off is due to institutional capital shifting towards AI infrastructure rather than a decline in Bitcoin’s fundamentals. Concerns were also raised about Strategy selling 32 BTC to fund preferred-share dividends, despite recently reducing debt by repurchasing $1.5 billion of convertible notes at a discount.
Overall, the current market conditions suggest a period of uncertainty and fear among investors, with Bitcoin’s price struggling to find solid ground amidst ongoing volatility.
