The ICT Turtle Soup is a price action strategy built around false breakouts. It targets failed moves at major support and resistance levels across forex and other markets. Turtle Soup trading focuses on liquidity sweeps that trap breakout traders before price reverses. It uses the reversal that often follows a stop run for entry timing.

This article covers the Turtle Soup forex setup along with its core components. Let’s discuss the conditions traders watch for and the entry framework that goes with them.

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What Is the ICT Turtle Soup Pattern?

The ICT Turtle Soup is a reversal approach based on failed breakouts at key support and resistance levels. This forex reversal strategy comes from the Inner Circle Trader (ICT) methodology and frames failed moves as setups.

Traders aim to identify and take advantage of situations where the price briefly moves beyond a major support or resistance level, only to reverse direction shortly after. This movement is often seen in ranging markets where prices oscillate between established highs and lows.

The concept behind ICT Turtle Soup trading is rooted in the idea of stop hunts and market imbalances. When the price breaks out, it often triggers stop-loss orders set by other traders, creating a temporary imbalance. A failed breakout occurs when price returns inside the prior range after sweeping a swing level.

The ICT Turtle Soup strategy seeks to capitalise on this by entering trades in the opposite direction once the breakout fails and the price returns to its previous range​.

The ICT version adapts the original Turtle Soup setup from Linda Raschke and Larry Connors. In the ICT strategy, forex traders apply it on intraday charts using liquidity and order flow, not fixed 20-day breakout rules.

Typically, traders look for signs of a false breakout. This often shows as price briefly moving above a recent high or below a recent low. Price then fails to sustain the move.

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ICT Turtle Soup vs Breakout Strategies

The Turtle Soup strategy and standard breakout trading sit on opposite sides of the same setup. Breakout traders typically enter when price clears a high or low, expecting momentum to continue. ICT Turtle Soup traders wait for that move to fail, then look to position in the opposite direction.

The choice between Turtle Soup vs a breakout strategy depends on the prevailing market context. Breakouts typically work in trending conditions where buying or selling momentum drives continuation. Turtle soup setups work around range edges where liquidity sits and breakouts often fail.

Core Elements of the ICT Turtle Soup Setup

The ICT Turtle Soup setup uses several elements working together to identify failed breakouts. Each element provides context for where price might sweep liquidity before reversing back inside the prior range.

The core elements traders typically work with include:

• Order flow and market structure across higher and lower timeframes
• Liquidity and stop hunts at swing highs and swing lows
• Internal and external liquidity zones inside the range
• Order blocks and imbalances as supportive context

Each element below shows how price typically reacts during a Turtle Soup trading setup.

Order Flow and Market Structure

Order flow and market structure are critical in analysing the ICT Turtle Soup pattern. This involves observing price movements and traders’ behaviour in different timeframes.

Order flow refers to the sequence of buying and selling activity that drives price. Market structure organises that activity into recognisable patterns of highs and lows. Together, they describe the directional bias of a market.

Traders also track a Market Structure Shift (MSS), which signals a potential change in trend direction. An MSS appears when price breaks an opposing swing point with displacement. Displacement here means a strong, single-direction candle that closes well beyond the broken level.

If you want to analyse higher and lower timeframe price movements, consider using FXOpen’s TickTrader platform.

Higher Timeframe Structure

This refers to the broader trend governing the lower timeframe trend. For traders using the 15m-1h charts to trade, this might mean structure visible on 4h or 1d charts.

Higher timeframe structures may help traders identify the major support and resistance levels. These levels are important as they mark the boundaries within which the market generally oscillates. Traders use these to determine the prevailing market direction and potential areas where false breakouts (stop hunts) are likely to occur​.

This higher timeframe view sets the directional bias for the Turtle Soup setup. A market making higher highs and higher lows suggests a bullish bias, where traders typically look for long-side setups after liquidity sweeps below swing lows. The reverse applies in a bearish structure of lower highs and lower lows.

Lower Timeframe Structure

Lower timeframe structures are examined on hourly or minute charts. These provide a more detailed view of price action within the higher timeframe’s range. They also account for the bullish and bearish legs that dictate a broader higher timeframe trend.

On these charts, traders watch for a Break of Structure (BOS) that aligns with the higher timeframe bias. A BOS occurs when price breaks a recent swing high or low in the trend’s direction. Displacement supports the move when a strong candle closes well beyond that swing point with limited pullback.

Together, these signals confirm the lower timeframe is aligning with the Turtle Soup setup bias.

Liquidity and Stop Hunts

In general trading terms, liquidity represents how easy it is to enter or exit a market. However, in the context of the ICT Turtle Soup pattern, areas of liquidity can be identified beyond key swing points.

These pools of stop-loss orders sit just above swing highs and just below swing lows. These orders are ready to be triggered if price reaches the level.

Stop hunts in trading, also known as a liquidity sweep or stop run, are central to Turtle Soup setups. They occur when price moves through a resistance or support level, triggering clustered stop-loss orders that sit beyond. Triggered stops create a liquidity spike that allows price to reverse back into the range. Traders applying the ICT Turtle Soup strategy typically position against the initial breakout direction once that liquidity has been swept.

Internal and External Liquidity

Internal and external liquidity sit on opposite sides of the higher timeframe range. Identifying both is central to Turtle Soup forex setups, since each plays a different role.

Internal liquidity refers to the liquidity available within the range of the higher timeframe structure. It involves identifying smaller support and resistance levels within the larger range. In a bullish leg, internal liquidity rests beneath each higher low. In a bearish leg, it sits above each lower high. This internal liquidity is often swept to start a counter-move within the broader trend.

External liquidity involves liquidity that exists outside the major highs and lows of the higher timeframe trend. The swing low where a bullish leg started is one external liquidity zone. The swing high where a bearish retracement began is another external liquidity zone.

Quick reference:

• Internal liquidity: inside the higher timeframe range, beneath higher lows (bullish) or above lower highs (bearish).
• External liquidity: outside the higher timeframe range, at the extremes that defined the leg.

Context Tools: Order Blocks and Imbalances

While not directly involved in the ICT Turtle Soup setup, order blocks and imbalances act as supportive context rather than required components. Understanding them can provide insight into where the price might head and the general market context.

Order blocks are areas where significant buying or selling activity has previously occurred, often due to institutional orders. These blocks represent zones of support and resistance where the price is likely to react.

• Bullish order blocks form at the base of upward moves and often act as support on a revisit.
• Bearish order blocks form at the top of downward moves and often act as resistance.

Imbalances, or more precisely fair value gaps (FVGs), are price regions where the market has moved too quickly. When price rapidly moves in one direction, it leaves behind an area with little trading activity. The market often returns to fill these gaps before continuing.

ICT Turtle Soup Setup Conditions

The ICT Turtle Soup setup forms when several conditions appear together on the chart. Each condition narrows the context until a failed breakout becomes the likely outcome.

The conditions for this liquidity grab trading strategy traders typically look for include:

• A defined higher timeframe bias
• Marked internal liquidity inside that bias
• A liquidity sweep that fails to hold
• Lower timeframe confirmation aligned with the higher timeframe direction

Establishing a Bias

Traders begin by analysing the higher timeframe trend, such as the 4h daily charts, to establish a market bias. This analysis may help determine whether the market is predominantly bullish or bearish.

Measurable criteria for the bias typically include:

• A break of structure in one direction on the higher timeframe
• A series of higher highs and higher lows for a bullish bias
• A series of lower highs and lower lows for a bearish bias
• Price respecting key swing points without violating them in the opposite direction

Once the bias is set, traders only look for setups that align with that direction.

Identifying Internal Liquidity

Once the higher timeframe trend is established, traders mark levels of internal liquidity inside the broader leg.

Internal liquidity typically rests in these locations:

• Below recent swing lows in a bullish leg
• Above recent swing highs in a bearish leg
• Beneath equal lows or above equal highs, where stop clusters build
• At round-number levels that attract retail stop placement

These zones are likely to attract stop-loss orders, making them probable targets for a liquidity sweep before the higher timeframe trend resumes.

Liquidity Sweep Trading Condition

The condition is met when price briefly breaks through a marked internal liquidity level, then reverses back inside the range. This typically happens when stop-loss orders are triggered before price quickly returns.

Confirmation comes from wick and close behaviour. Price should sweep the level with a wick that extends beyond it, then close back inside the prior range on the same candle. A small wick relative to the candle body suggests the sweep absorbed liquidity efficiently.

The setup fails when price closes beyond the swept level instead of reversing. A close outside the range, especially with continuation in the next candle, signals a genuine breakout rather than a Turtle Soup condition.

Lower Timeframe Confirmation

After identifying a liquidity grab beyond this internal liquidity level, traders look for an entry on a lower timeframe. They watch for a Market Structure Shift (MSS) in the direction of the higher timeframe bias. Displacement supports the shift when a strong candle closes well beyond the lower timeframe swing point.

Price often retraces back into the range to fill an imbalance before continuing. This retracement frequently meets an order block left behind by the displacement candle. The combination of MSS, displacement, and an order block retest typically gives a precise entry zone aligned with the higher timeframe direction.

Entry, Stop Loss, and Targets

Once the conditions described above appear together, traders typically position in the direction of the higher timeframe bias. The setup gives a clear framework for entry, stop loss, and target placement.

• Entry zone: A limit order at the order block left behind by the displacement candle, in line with the higher timeframe direction.
• Stop loss: Placed just beyond the liquidity sweep wick. Above the recent high for a short trade, below the recent low for a long trade.
• Targets: Set at major liquidity levels such as previous highs or lows, where significant orders are likely to sit.

Position sizing and stop placement should align with the trader’s broader risk management approach. The framework above outlines structure, but potential risk per trade still depends on account-specific factors.

Potential Advantages and Limitations

The ICT Turtle Soup pattern is a trading strategy with several potential benefits and drawbacks.

Advantages

• Defined entry framework: The setup gives a specific entry zone, stop placement, and target structure, which removes ambiguity about where to act.
• Multi-timeframe applicability: The pattern can be applied across different timeframes and market conditions, including ranging and trending markets.
• Structured risk parameters: Stop losses sit just beyond the liquidity sweep, which produces a defined risk distance for each setup.

Limitations

• Steep learning curve: Applying the setup requires familiarity with market structure, liquidity, and order flow, which takes time to build.
• Sensitive to market conditions: Highly volatile or thin markets can produce false signals where sweeps continue rather than reverse.
• Time-intensive: The setup demands monitoring multiple timeframes to identify valid conditions, which limits how many markets a trader can cover at once.

The Bottom Line

The ICT Turtle Soup is a pattern built around failed breakouts and liquidity sweeps at key support and resistance levels. It frames a reversal setup with defined conditions for bias, liquidity sweep behaviour, lower timeframe confirmation, and entry placement.

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Like any approach, its outcomes depend on context. The setup tends to work where range edges hold and breakouts fail. It tends to underperform where momentum carries through swept levels. Disciplined execution, careful risk management, and alignment with the broader market context remain the deciding factors.

Traders who want to apply the framework on live markets may open a forex trading account with FXOpen and trade with tight spreads from 0.0 pips and low commissions from $1.50.

FAQs

What Is ICT Turtle Soup in Trading?

ICT Turtle Soup is a method that exploits false breakouts in trading. It identifies potential reversals when the price briefly moves beyond a major support or resistance level, triggering stop-loss orders before reversing direction. This strategy aims to take advantage of these liquidity grabs by entering trades opposite to the initial breakout direction​.

What Are the Conditions for ICT Turtle Soup?

To identify the ICT Turtle Soup pattern, traders analyse higher timeframe trends to establish market bias. They then look for counter-trend moves and mark internal liquidity areas. The pattern is identified when the price taps these liquidity zones and reverses quickly, often leaving a small wick. This signals a liquidity grab and potential trade setup in the direction of the higher timeframe trend​.

How May Traders Use the ICT Turtle Soup Pattern?

According to theory, using the ICT Turtle Soup pattern involves several steps. First, traders establish a market bias based on higher timeframe analysis. Then, they look for liquidity grabs at marked internal liquidity areas, indicating false breakouts. The next step is to confirm the setup on a lower timeframe by observing a similar liquidity grab and structure break. Lastly, they are supposed to enter trades in the direction of the higher timeframe trend, placing stop losses just beyond the liquidity grab and targeting key liquidity levels for profit-taking​.

What Is a Turtle Soup Setup in Forex Markets?

A turtle soup setup in forex markets is a failed breakout pattern at a key swing level. Price briefly breaks a recent high or low and sweeps clustered stop-loss orders. It then reverses back inside the prior range. Traders typically position against the initial breakout once the sweep is confirmed.

What Confirms a Liquidity Sweep in ICT Trading?

A liquidity sweep is confirmed by specific wick and close behaviour. Price should extend beyond a marked swing point, then close back inside the prior range. The wick reaches past the level while the candle body stays inside. A close beyond the level without reversal suggests a genuine breakout instead.

Is Turtle Soup a Reversal or Continuation Pattern?

Turtle soup is classified as a reversal pattern, not a continuation pattern. It targets failed breakouts where price moves through a level and then returns inside the prior range. The setup positions against the initial breakout direction rather than with it. Continuation patterns take the direction of the breakout instead.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

The White House’s regulatory review office is examining a proposed Commodity Futures Trading Commission (CFTC) rule on prediction markets, according to a federal filing that could shape how platforms such as Kalshi and Polymarket operate across the U.S.

A RegInfo.gov entry shows that the proposal was received by the Office of Information and Regulatory Affairs on May 26 under Executive Order 12866, triggering a review of what the CFTC describes as a proposed rule on “Prediction Markets.” The filing does not include the text of the proposed rule.

The move marks one of the clearest signs yet that the CFTC is preparing a broader federal framework for event contracts, following months of legal and political battles over sports and election markets.

Illinois, New Jersey and other states have argued that sports-linked event contracts effectively function as online betting markets. Kalshi and the CFTC have countered that designated contract markets regulated under federal commodities law fall under the agency’s exclusive authority.

The executive order governs how major federal regulations are vetted before publication, requiring agencies to submit significant rules for economic and policy analysis. OIRA, a division within the Office of Management and Budget, oversees the process.

The timing comes days after President Donald Trump publicly backed the CFTC’s authority over prediction markets, as CoinDesk previously reported, calling it “critically important” that the agency retain “exclusive authority” over the sector in a Truth Social post.

The proposal follows a March advance notice of proposed rulemaking in which the CFTC sought public comment on which prediction market contracts may be prohibited as “contrary to the public interest,” including contracts tied to elections, gaming, and sports.

The US Commodity Futures Trading Commission has asked a federal court to vacate its $5 million settlement with crypto exchange Gemini, claiming that the agency’s enforcement action was based on flawed allegations.

Gemini settled with the CFTC and paid a $5 million fine in January 2025 in the final weeks of the Biden administration after the agency accused it of making false or misleading statements related to a Bitcoin futures contract.

The CFTC filed a joint motion with Gemini in a Manhattan court on Wednesday seeking to vacate the settlement, adding in a statement that it had reviewed the matter and concluded that the “complaint should not have been filed — and would not have been under current enforcement standards.”

The CFTC said the complaint, brought under the Biden administration, was “largely based on a whistleblower’s account known to be lacking in credibility.” 

“Accordingly, the CFTC determined that continuing enforcement of the consent order’s prospective provisions serves neither the CFTC’s mission nor the public interest,” it said.

Source: CFTC

The CFTC’s request adds to a string of crypto lawsuits and investigations that the agency and the Securities and Exchange Commission have abandoned under US President Donald Trump.

Gemini co-founders Tyler and Cameron Winklevoss each donated $1 million to Trump’s election campaign in 2024.

The CFTC’s motion comes after Trump’s former CFTC chair nominee, Brian Quintenz, in September shared on X messages from Gemini CEO Tyler Winklevoss, who asked if he would review the agency’s case against the company if he were made chair.

Trump later withdrew Quintenz’s nomination and instead backed Mike Selig, a former lawyer for crypto companies who has taken a supportive stance toward the crypto industry.

The CFTC’s request seeks to end ongoing obligations imposed on Gemini under the settlement, including an injunction barring it from making false or misleading statements to the agency. 

“Applying the remaining provisions — including injunctive relief — prospectively would not be equitable,” the agency said. It noted that Gemini has already paid a $5 million fine, but it was not clear if the agency would refund the penalty.

The case stemmed from allegations that Gemini made misleading statements in 2022 during the review of a Bitcoin futures contract, particularly regarding its auction volumes and liquidity. 

The CFTC said these claims were relevant to assessing risk and the contract’s approval. 

Related: CME Group to launch regulated Bitcoin volatility futures 

The CFTC’s complaint relied on allegations from a whistleblower in 2017, who claimed that Gemini inflated trading activity and volumes to distort user demand.

The agency argued in its latest filing that the whistleblower’s allegations were based on statements from Gemini’s former chief operating officer and a subordinate, who allegedly made threats against Cameron and Tyler Winklevoss, and was allegedly known to lie about material facts.

The CFTC also argued that Gemini was a victim of fraud, claiming that two customers exploited Gemini’s “preferential fee structures through a coordinated rebate-fraud scheme.”

It also alleged that the two customers admitted defrauding Gemini of $7.5 million through this scheme, but the past leadership “did nothing with those admissions.”

Cointelegraph contacted Gemini and the CFTC for comment.

Magazine: eToro founder timed Bitcoin top perfectly due to belief in 4 year cycles

Ethereum traded below the $2,000 level as on-chain activity weakened and short-term technical indicators stayed under pressure.

The move came as exchange withdrawal data dropped to its lowest level since June 2024, while failed transactions and exchange inflows showed fresh signs of network and market stress.

Ethereum withdrawals fall to June 2024 low

Data from the Ethereum Exchange Outflow 30D indicator showed that total withdrawals from exchanges fell to about 16.05 million ETH. Arab Chain said the reading marked the lowest level since June 2024.

Lower exchange withdrawals can show that fewer users are moving ETH away from trading platforms. This often points to slower long-term accumulation, especially when price action remains weak or range-bound.

Binance led Ethereum withdrawals with about 7.00 million ETH. OKX followed with around 1.43 million ETH, while Coinbase Prime ranked third with about 1.12 million ETH. Kraken, Bitget, and HTX Global recorded lower withdrawal activity.

The drop does not give a direct bearish signal on its own. Still, it shows that off-exchange activity has slowed at a time when Ethereum is trying to hold key support levels.

Failed transactions and inflows add pressure

Separate on-chain data shared by nino showed that Ethereum failed transactions may be rising. The same update also pointed to a slight increase in exchange inflows.

The analyst described the failed transaction count as “may be experiencing an upward trend” and said the mix of network friction and exchange-bound liquidity “could possibly indicate a somewhat bearish outlook.”

A rise in failed transactions can suggest higher network friction, user errors, or pressure around smart contract activity. It does not always mean demand is falling, but it can weaken confidence when paired with soft price action.

Exchange inflows can also carry market risk. When more ETH moves onto exchanges, traders may prepare to sell, hedge, or reposition. That does not confirm selling, but it adds caution during a weak market.

Ethereum price breaks below $2,000

Ethereum (ETH) traded near $1,986 after falling below the $2,000 mark. The move placed ETH under a key psychological level that traders often watch during market pullbacks.

As previously reported by crypto.news, the broader crypto market remained under pressure on May 28 after Bitcoin and Ethereum broke key support levels. The report said more than $900 million in leveraged crypto positions were liquidated across the derivatives market.

Ethereum also fell as the total crypto market weakened. Bitcoin dropped below $73,000, while major altcoins also posted losses as traders reduced exposure to risk assets.

Santiment said Ethereum’s drop below $2,000 triggered more “buy the dip” calls from retail traders. The firm warned that strong crowd optimism after a sharp decline can sometimes mean the market still has more downside before fear returns.

ETH technical analysis shows bearish bias

Ethereum remains below the Bollinger Band midline near $2,169. That shows short-term weakness because price has not reclaimed the central range.

ETH is also trading close to the lower Bollinger Band near $1,957. This area now acts as a key support zone. A break below it would show stronger downside pressure and could expose lower price levels.

The Bollinger Bands are compressing after the recent decline. The upper band sits near $2,380, while the lower band sits near $1,957. A recovery above $2,169 would be the first clear sign that the short-term structure is improving.

The RSI stands near 29.69, below its moving average near 36.02. This confirms weak momentum and seller control. However, the low RSI also means ETH is close to oversold territory, where short-term relief bounces can form if buyers return.

For now, Ethereum’s short-term setup remains bearish. Holding the $1,950–$1,970 area is important. A drop below that range could keep sellers in control, while a move back above $2,169 would ease pressure and help rebuild recovery momentum.

The crypto market remained under pressure on Thursday as renewed military tensions between the United States and Iran triggered another sharp wave of liquidations and ETF outflows.

According to data from CoinGecko, the total cryptocurrency market capitalization fell roughly 4% over the past 24 hours to around $2.48 trillion, while Bitcoin (BTC) dropped from the $76,000 region to hit a five-week low below $73,000 before recovering slightly at press time.

Ethereum (ETH) fell more than 5% below the $2,000 mark, while major altcoins, including Solana (SOL), XRP (XRP), BNB (BNB), Dogecoin (DOGE), and Hyperliquid (HYPE), recorded losses ranging between 6% and 14% as traders continued reducing exposure to risk assets amid rising macro uncertainty.

According to CoinGlass data, over $900 million worth of crypto positions were liquidated across the derivatives market over the past 24 hours, with bullish long positions accounting for most of the wipeout.

The latest decline accelerated after Bitcoin lost support near $75,000 while Ethereum broke below the $2,100 area, triggering another cascade of forced liquidations across leveraged trading platforms.

As exchanges automatically closed underwater bullish positions, the additional forced selling added more pressure to spot prices and intensified downside momentum across the broader market.

Oil prices jump as U.S.-Iran tensions escalate

Investor sentiment also deteriorated after military tensions between Washington and Tehran intensified again this week.

WTI crude futures climbed 2.6% to trade above $91 per barrel on Thursday, while Brent crude rose toward the $96 region after reports emerged that U.S. forces struck Iranian military targets believed to threaten commercial shipping routes near the Strait of Hormuz.

At the same time, Iran’s Revolutionary Guard reportedly targeted a U.S. airbase, though officials did not disclose the location.

Negotiations between both countries also remained deadlocked, with Iran reportedly insisting on retaining control over the Strait of Hormuz and preserving its nuclear program as part of any potential agreement.

The latest escalation weakened expectations for a short-term peace deal that could reopen the key shipping corridor and normalize global oil flows.

Rising energy prices added to fears that inflation could remain elevated for longer, potentially reducing the likelihood of near-term Federal Reserve interest-rate cuts and tightening liquidity conditions for speculative assets such as cryptocurrencies.

ETF outflows extend as institutions reduce exposure

Institutional demand also weakened considerably over the past two weeks.

U.S. spot Bitcoin ETFs recorded roughly $733 million in net outflows on Wednesday, the largest single-day withdrawal since February this year. The latest exits additionally extended the products’ losing streak to eight consecutive trading sessions.

Meanwhile, spot Ethereum ETFs extended their own outflow streak to 12 straight days after another $67 million exited the funds on Wednesday.

Cumulative withdrawals from U.S. spot Bitcoin ETFs have now reportedly reached $2.33 billion over the past two weeks as institutional investors continued rotating capital away from crypto products during the recent volatility.

In a report shared with crypto.news, Bitfinex analysts highlighted that Bitcoin’s market structure weakened after a recent $766 million liquidation event, rather than undergoing a full leverage reset typically seen after large derivative flushes.

The analysts noted that futures open interest dropped sharply after Bitcoin corrected more than 10% from highs above $82,000. However, leveraged positioning reportedly returned unusually quickly afterward, largely driven by retail traders reopening bullish positions on crypto-native exchanges.

Analysts added that institutional venues such as CME have not shown similar leverage activity, while the Coinbase Premium Gap remained negative despite elevated funding rates.

The report also noted that options traders continued paying premiums for downside protection ahead of Thursday’s U.S. Personal Consumption Expenditures report, the Federal Reserve’s preferred inflation gauge.

“A hot print for PCE on Thursday, 28 May would increase stress on the leverage-long book by shifting the rate path outlook, whereas an in-line print would remove the macro catalyst, forcing the range to resolve purely on positioning dynamics,” Bitfinex analysts said.

Bitcoin is facing a mixed market setup as exchange reserves fall to rare lows while short-term price indicators and holder profitability remain weak.

Bitcoin exchange reserves have fallen to 2,666,753 BTC, according to CryptoQuant data shared by thechessONCHAIN. The last comparable reading came on August 31, 2019, when Bitcoin traded near $9,430. Bitcoin now trades far higher at nearly the same exchange inventory level.

Meanwhile, the drop means fewer coins sit on trading platforms for immediate sale. That can reduce available supply, but it does not guarantee a price rebound. For Bitcoin to move higher, demand must be strong enough to absorb supply and rebuild market confidence.

The current setup differs from 2019 because spot Bitcoin ETFs now create a demand channel that did not exist during that earlier cycle. U.S. spot Bitcoin ETFs started trading in January 2024, and exchange reserves have kept falling during the ETF era.

That shift changes the supply picture, but it does not settle the price outlook. The main question is whether ETF demand and spot buying can offset weak cycle data and cautious holder behavior.

Cycle data keeps Bitcoin bulls cautious

The CryptoQuant Bull-Bear Market Cycle Indicator shows a different backdrop from 2019. On August 31, 2019, the indicator stood at +0.83, placing Bitcoin in a bull zone. Its 30-day moving average was +1.045, while its 365-day average was -0.206.

The latest reading points the other way. In May 2026, the indicator stood at -0.379, while the 30-day moving average was -0.375 and the 365-day moving average was -0.323. That keeps Bitcoin in a weaker cycle zone even as exchange reserves continue to fall.

This means the reserve drop alone does not confirm a bullish trend. The market has a tighter exchange supply, but the cycle indicator has not yet shown the same strength seen in 2019.

Crypto analyst K A L E O also pointed to cycle timing as a bear case for short-term optimism. He noted that past market bottoms arrived much later after halvings and said, “I’d love to see a bounce at $70K,” while also stating that he was ready for more time in the current range.

Long-term holder SOPR shows weaker profitability

Long-term holder profitability also shows pressure. Arab Chain said the long-term holder SOPR has fallen to around 0.87 while Bitcoin trades near the mid-$70,000 area. SOPR tracks whether coins moved by long-term holders are being spent in profit or loss.

A reading below 1 means some long-term holders are moving or selling Bitcoin below their purchase price. That does not always mark the end of a longer trend, but it shows that large or older holders are not selling from a strong profit position.

Source: CryptoQuant

The reading has also moved lower in recent months after sitting at higher levels during stronger market phases. That points to caution among long-term holders after recent volatility and the pullback from earlier highs.

Some traders still view lower SOPR zones as periods of rebalancing. In past cycles, weak holder-profit readings have appeared during consolidation phases before stronger moves returned. For now, the data shows pressure rather than clear recovery.

Bitcoin price analysis: MACD and RSI stay bearish

Bitcoin (BTC) traded near $73,257 at the time of writing, with an intraday high near $75,944 and a low near $72,678. The price remains below the mid-to-high $70,000 area that bulls need to reclaim for a stronger short-term recovery.

The MACD remains bearish. The MACD line is below the signal line, and the histogram is still negative at around -145. That shows downside momentum remains active, although the histogram is not deeply stretched.

The RSI sits near 35.12, below its moving average around 45.03. This shows that sellers still control short-term momentum. RSI is moving closer to oversold levels, but it has not reached a point that confirms a full reset.

Traders are also watching whale positioning. CW said Bitcoin whales had moved toward long positions but warned, “We need to see if they maintain this trend.” 

The short-term bias remains cautious while Bitcoin trades below stronger recovery levels. A move back above the mid-to-high $70,000 zone with stronger volume could improve the setup. Failure to hold current levels may keep attention on support near $70,000 and $68,000.

Crypto markets shed roughly $80 billion in value over the past 24 hours as fresh US strikes on Iran rekindled geopolitical risk and unsettled investors. Bitcoin slid to around $72,646 on Coinbase, its lowest since April 13, while Ether eased below $2,000, trading near $1,976 as risk appetite evaporated in the wake of the flare‑up.

The US military confirmed a new round of strikes late on Wednesday targeting an Iranian military site and said it shot down four Iranian attack drones. A US official told Reuters that the actions were intended to be defensive and to maintain a ceasefire, underscoring the delicate balance in play as negotiations continue to attempt to end the broader conflict. Iran’s Islamic Revolutionary Guard Corps reportedly retaliated by attacking a US airbase in Kuwait, according to AP reports.

The strikes come as talks to halt the broader hostilities that began in late February—marked by US and Israeli offensives—proceed at a fragile pace. President Donald Trump, speaking at a White House cabinet meeting, indicated he remained not satisfied with the terms of any potential deal and suggested the possibility of further military action if needed. Crypto markets, which had shown tentative recovery earlier in the week on hints of a negotiated Iran settlement, reversed course in the face of renewed escalation.

Analysts noted that the immediate reaction reflected a risk-off posture among crypto traders, with heightened geopolitical risk, potential oil supply disruptions, and a flight to safety prompting broader deleveraging and liquidity tightening across digital assets. “Bitcoin and Ethereum, despite their long‑term narrative as hedges, continue to behave more like high‑beta risk assets during periods of uncertainty,” said Nick Ruck, director at LVRG Research. “Traders are now monitoring escalation risks in the Middle East, and any effects on inflation and Fed policy as crypto liquidity quickly thins, and leveraged positions get flushed out.”

The broader market backdrop remains sensitive to the convergence of political risk and energy prices. Oil markets reacted sharply to the news, with benchmarks climbing on the session: WTI crude moved above $92 per barrel and Brent hovered near $98, signaling tighter energy supplies could feed into inflationary pressures and potential policy responses in major economies.

Key takeaways

• Approximately $80 billion of crypto market value was erased in a 24-hour window amid renewed US strikes on Iran and rising geopolitical risk.
• Bitcoin traded around $72,646 on Coinbase, down about 3.5% for the day and at its lowest level since mid-April.
• Ether slid below the $2,000 mark, trading around $1,976, its lowest since late March.
• Crude oil prices rose, with WTI above $92 and Brent near $98 per barrel, amplifying concerns about inflation and policy responses.
• Market commentary framed crypto as a risk proxy in this episode, with liquidity thinning and leveraged positioning being flushed out as traders reassess the geopolitical tableau.

Geopolitics and the crypto risk dial

The latest wave of strikes reinforces how quickly macro and geopolitical developments can seep into crypto markets. The immediate price response reflected a broader risk-off sentiment that tends to undermine non‑yielding, inflation-hedge narratives in the near term. While the overnight moves are substantial, observers caution that the longer-term trajectory will hinge on whether diplomatic talks gain traction or deteriorate further, and how energy markets respond in the coming days.

Reuters’ portrayal of the US official’s characterization of the strikes as defensive helps frame the incident as a calibrated escalation rather than an open-ended conflict. Yet the retaliatory claim reported by AP, and the continuing negotiations, introduce a dynamic where any breakthrough or setback could quickly tilt market sentiment again. In this context, traders are weighing not only immediate price action but also the potential implications for macro variables such as inflation expectations and central bank policy—factors that historically shape crypto liquidity cycles.

Trader sentiment and the liquidity question

From a market mechanics perspective, the day’s moves underscore a recurring pattern: in times of geopolitical tension, crypto liquidity can thin as participants retreat to safer assets or reduce risk exposure. The trajectory of Bitcoin and Ether, which have at times benefited from the narrative of crypto as a hedge, now mirrors a more cautious stance where near-term catalysts drive sharper volatility.

“Bitcoin and Ethereum, despite their long-term narrative as hedges, continue to behave more like high-beta risk assets during periods of uncertainty. Traders are now monitoring escalation risks in the Middle East, and any effects on inflation and Fed policy as crypto liquidity quickly thins, and leveraged positions get flushed out.”

What to watch next

As negotiations continue, market attention will likely pivot to two pivotal threads: first, whether the tensions lead to further shocks to energy markets and credible inflationary pressures; second, how central banks respond, including any shifts in liquidity provision or policy signals that could influence crypto markets’ resilience. Investors and traders should monitor any escalation‑related headlines, potential changes in oil supply expectations, and the evolving tone from policymakers that could redefine risk appetite across digital assets.

The immediate setup remains delicate: a single development—be it a ceasefire concession, a new round of aerial strikes, or a diplomatic breakthrough—could shift the risk calculus overnight. For now, crypto traders appear to be prioritizing capital preservation, with the sector’s sensitivity to macro risk regimes underscoring the ongoing challenge of disentangling crypto markets from geopolitics.