Bitcoin's price slid below the 'Fire Sale' band on the Bitcoin Rainbow Chart on June 4, 2026 — the first time that level has been reached since the FTX exchange implosion in November 2022. The drop comes alongside a Fear and Greed Index reading of 12, squarely in 'Extreme Fear' territory and just a few points above the record low of 5 set in February. Meanwhile, MicroStrategy made its first Bitcoin sale since 2022, offloading 32 BTC to cover preferred-share dividends while simultaneously buying back $1.5 billion of its convertible notes.
Rainbow Chart breach
The Rainbow Chart, a long-term valuation tool, places Bitcoin in its lowest color band when the price falls below a certain threshold. The last time it happened was during the chaotic aftermath of FTX's bankruptcy. The recurrence suggests the market is pricing in severe downside, though the chart's creator has cautioned it's not a timing tool. Still, the milestone grabbed attention among traders who use it as a rough sentiment gauge.
Extreme Fear on the books
The Fear and Greed Index slipped to 12 on June 4, putting it at the lower end of 'Extreme Fear'. That's close to February's all-time low of 5, but not quite there. The index aggregates volatility, momentum, and social media sentiment. Readings this low historically have preceded recoveries — but also further drops. The index doesn't predict; it just measures the mood. Right now, the mood is bleak.
MicroStrategy breaks its buying streak
MicroStrategy sold 32 Bitcoin in June 2026, its first sale of the asset since 2022. The proceeds went to fund preferred-share dividends, a move that signals the company is managing its obligations rather than adding to its stack. At the same time, the firm repurchased $1.5 billion of its convertible notes — a debt management play that could reduce dilution. The sale is small relative to MicroStrategy's massive hoard, but symbolically it's notable. After years of relentless buying, a sale — even a tiny one — changes the narrative.
The Rainbow Chart is still in 'Fire Sale' territory, and the Fear and Greed Index hasn't hit its floor yet. MicroStrategy's next move on its Bitcoin treasury will be watched closely, especially if the price stays low. No one's calling a bottom — but the data points keep piling up.
