• XRP is holding a tight range near $1.35–$1.36 under pressure.
• Most moving averages and signals still show a dominant downtrend.
• RSI weakness suggests a pause, with $1.35 acting as key support.

XRP is trading at $1.36, sitting almost directly on a key short-term support zone after a steady decline across multiple timeframes.

The price has slipped 7.4% over the past seven days and 6.4% over the past month, extending a broader downtrend that has now reached a 44% drop over the past year.

This puts the current market situation of the Ripple token at the centre of a critical decision point, where bulls and bears are actively testing whether the support at $1.35 can hold.

XRP has entered a tight consolidation phase

XRP has been moving inside a very narrow range between $1.35 and $1.38 over the past 24 hours.

This tight consolidation often reflects hesitation in the market, where neither bulls nor bears have enough momentum to force a clear breakout.

The lower boundary of this range, $1.35, has now become the immediate level to watch.

A clean breakdown below this point would place XRP into a weaker technical structure, with little short-term support visible beneath it.

On the upside, the $1.38 level remains the first resistance barrier, and price has repeatedly failed to sustain moves above it in recent sessions.

But despite this compression, momentum indicators suggest the market is still leaning cautiously.

The 14-day RSI sits at 41.94, which is neutral but tilted toward weakness.

On the weekly chart, RSI drops further to 38.67, which is commonly interpreted as oversold territory.

This divergence between timeframes suggests that while short-term selling pressure is cooling, longer-term momentum remains under stress.

XRP’s technical structure remains under bearish control

A broader look at the trend shows that XRP is still trading below all major exponential moving averages (EMAs) on the daily chart.

These include the 10-day, 20-day, 50-day, 100-day, and 200-day EMAs, which are all positioned above the current price.

This signals a clear bearish structure, where every major trend line is acting as resistance rather than support.

In technical terms, this type of stacking usually reflects a market that has not yet completed a full reversal phase.

In addition, out of 23 tracked technical indicators, 13 are currently pointing to sell signals, while only 3 suggest buying conditions, and 7 remain neutral.

Moving averages alone account for 12 sell signals with zero buy signals, reinforcing the view that the long-term trend has not shifted back in favour of buyers.

At the same time, oscillators like the MACD and the RSI present a slightly different picture. With 3 buy signals against 1 sell signal, short-term momentum indicators show early signs of stabilisation.

However, this has not yet been strong enough to counter the dominant bearish trend formed by the moving averages.

The next directional move will depend heavily on whether buyers can defend the $1.35 support zone or whether selling pressure forces a breakdown into lower price territory.

Short-term estimates point to movement toward $1.39, while broader yearly forecasts place 2026 within a wide range between $0.82 and $2.12.

Hyperliquid and Zcash are leading the altcoin market, but analysts warn that crowded sentiment and stretched indicators may raise pullback risk.

Hyperliquid traded near $59.11 on May 22 after gaining 29.68% over seven days and 45.77% over the past month. The token reached an all-time high of $62.18 on May 21, while 24-hour volume stood at about $1.42 billion.

The move keeps HYPE among the strongest large-cap crypto assets during a weaker market. Related coverage noted that HYPE broke above $60 on May 21, with ETF demand and DeFi-native speculation helping drive the rally.

Ali Martinez said in a post on X that Hyperliquid’s price action has drawn record social attention. The analyst said HYPE has reached new all-time highs while social media mentions also moved to record levels.

That attention can support momentum, but it can also raise risk. When a trade becomes crowded, traders often watch for signs that late buyers are entering near resistance instead of early in the move.

HYPE traders watch the $60 zone

Ali Martinez said HYPE is approaching a key resistance area while several indicators show possible exhaustion. He pointed to an active TD Sequential Combo 13 sell signal, overbought RSI, and elevated Chande Momentum Oscillator readings.

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The analyst said HYPE “could still push toward $59 or even slightly above $60” before momentum fades. He added that rejection from that area could open a move toward about $40. That view is a conditional setup, not a confirmed price path.

Recent HYPE coverage also carried a similar caution. After the break above $60, crypto.news noted that short-term volatility risk remained high even as medium-term structural flows stayed supportive.

Those flows include new listed products. 21Shares launched the first U.S. exchange-traded funds tied to HYPE, including a spot product with staking exposure and a leveraged product. The firm said Hyperliquid handles about $8 billion in daily trading volume and directs more than 95% of fees toward daily HYPE buybacks.

Bitwise has also linked its Hyperliquid ETF fee model to HYPE demand. The asset manager said it would use 10% of management fees from its BHYP product to buy and hold HYPE on its balance sheet.

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Zcash price rally faces $700 test

Zcash traded near $645.63 on May 22, down 2.76% over 24 hours but still up 20.35% over seven days and 100.43% over 30 days. Its 24-hour trading volume stood near $690 million, while its market cap was about $10.8 billion.

The rally pushed ZEC close to the $700 area before a mild pullback. The same price data showed a 24-hour range between $645.73 and $682.56, keeping traders focused on whether buyers can reclaim the upper end of the move.

Recent crypto.news coverage said ZEC moved toward $700 after confirming a bull flag breakout. That report linked the rally to regulatory relief, institutional accumulation, and stronger technical momentum.

Ardi said on X that the recovery toward $680 did not look mainly retail-driven. He said retail participation stayed mostly flat while buying came from mid-sized flows, with larger flows starting to recover after the correction.

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$ZEC

What’s been interesting about the recovery back to $680 is that the move doesn’t really look retail-driven.

Retail participation has mostly remained flat throughout the structure, while the majority of the buying has continued coming from mid-sized flows.

At the same… pic.twitter.com/2Dxc2zEVFc

— Ardi (@ArdiNSC) May 22, 2026

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ZEC traders weigh breakout and reversal risk

Ali Charts said Zcash has climbed more than 40% in one week and is nearing the same $700 to $730 area that caused a major rejection in November. He also said the TD Sequential is flashing a weekly sell signal.

The analyst said the weekly signal matters because any confirmed correction could be larger than a short-term pullback. He mapped a first downside area near $500 and a deeper retracement zone near $380.

That warning fits earlier market caution. A recent crypto.news report said traders had already been weighing a possible $750 target against leverage risk. The report cited concerns that weak spot demand and heavy perpetual trading could expose ZEC to faster reversals if momentum fades.

Another recent report said ZEC’s monthly rally had already crossed 70%, with a golden cross adding to bullish expectations. It also noted that Multicoin Capital’s ZEC accumulation disclosure and rising privacy-asset demand helped fuel the move.

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Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.

Crypto majors bitcoin BTC$77,341.59 and ether (ETH) head into the weekend having been confined to a tight trading range over the past four days, with BTC being trapped between $76,100 and $78,000.

The lack of volatility has led to little pockets of the altcoin market benefitting from the speculative nature of crypto investors. The AI sector was the recipient of such speculation on Friday as NEAR increased by 28.5% while FET posted an 11.4% gain in the past 24 hours.

Conversely, privacy coins DASH, ZEC and XMR experienced a wave of sell pressure on Friday, eroding much of their early week rally, indicating that sector rotation is in full effect.

Brent crude oil dropped to $102 per barrel on Friday, down from $112 seen earlier this week as speculation swirls around a potential peace deal between Iran and the U.S.

U.S. equities responded well to the drop off in oil; Dow Jones Industrial Average closed at a record high on Friday, while Nasdaq 100 and S&P 500 are now up by 3% and 1.7% respectively since Tuesday’s low, suggesting a return to risk-on sentiment.

Derivatives positioning

• Crypto futures market-wide volume rose modestly by 1% to $160 billion in the last 24 hours, while notional open interest (OI) remained stable near $128 billion. Liquidations declined sharply by 26% to $200 million. This setup reflects a calmer market with reduced forced liquidations, even as volume growth remains relatively muted.
• Today’s standout token is Near Protocol’s NEAR, which has gained over 25%. With the price rise, OI in futures tied to the token has surged to a record high of 282.53 million tokens. The OI-adjusted 24-hour cumulative volume delta is positive, a sign of aggressive buying at market orders rather than passive limit orders. This validates the upswing in prices. And last but not least, funding rates remain mildly positive, suggesting healthy leverage conditions and no overheating.
• Markets tied to TRX and LINK display a similar bullish profile, characterized by OI growth, positive CVDs and positive funding rates.
• The bitcoin market offers little excitement, with OI steady in the recent 720K BTC to 750K BTC range. The same can be said for ether.
• Both BTC and ETH’s annualized 30-day implied volatility indices continue to slide. That’s a sign of relentless volatility selling via options, mostly call overwriting.
• On Deribit, bitcoin puts at strikes ranging from $71,000 to $77,000 dominate the 24-hour volume rankings. Similar volume concentration is seen in ether puts. A put option offers protection against price losses in the underlying asset.

Token talk

• CoinDesk’s DeFi Select Index (DFX) was up by 1.1% on Friday, outperforming the CoinDesk Smart Contract Platform Select Capped Index (SCPXC), up by just 0.3%, and the CoinDesk Memecoin Select Index (CDMEME) after it tumbled by 1%.
• The altcoin market was generally a mixed bag on Friday; XRP, SOL and ETH all lost ground alongside the privacy coin sector while the likes of HYPE and ATOM continue to show relative strength, with the later posting a 5% gain since midnight UTC.
• HYPE, the native token of perpetual exchange HyperLiquid, has been its own animal this week – rising to a barnstorming record high after surging by around 60% since Tuesday.
• The move comes alongside heavy short interest and a wave of liquidations coupled with institutional participation following the launch of spot ETFs in the U.S. this month.
• CoinMarketCap’s “altcoin season” indicator rose from 31/100 to 38/100 this week, buoyed by HYPE’s strong performance.

Crypto markets love pretending they run on fundamentals. In reality? A massive part of the market moves because of attention velocity — who’s being talked about, which narrative is trending, what influencers are amplifying, and which meme is capturing the timeline for 48 hours before everyone rotates to the next shiny thing. 😅

The uncomfortable truth is that many traders are not investing in technology, revenue, or long-term adoption. They are trading social gravity.

And sometimes, that matters more than the product itself.

The Market No Longer Trades Fundamentals First

Traditional finance often values assets based on cash flow, earnings, or economic performance.

Crypto operates differently.

A token can rally 300% with:

• no revenue,
• no users,
• no sustainable tokenomics,
• and sometimes no working product.

Why?

Because markets now react to visibility before utility.

If enough people pay attention to a narrative, liquidity follows. Once liquidity arrives, traders chase momentum. Then engagement algorithms amplify the movement even further.

The cycle feeds itself.

In many cases, price is simply the chart representation of collective online attention.

Narrative Rotation Is the Real Market Cycle

Every cycle in crypto develops its own obsession:

• DeFi summer
• NFTs
• Play-to-earn
• AI tokens
• Solana memes
• Restaking
• RWAs
• Telegram trading bots
• Perp DEXs

The pattern rarely changes.

Capital rotates toward the story, attracting the most engagement at a specific moment.

Sometimes the underlying technology is genuinely innovative. Other times, the narrative arrives years before actual adoption.

But traders often don’t care.

They only need enough momentum to front-run the next wave of attention.

This is why entire sectors can explode in valuation before proving product-market fit. The narrative itself becomes the asset.

Influencers Became Market Infrastructure

Crypto influencers are no longer just commentators.

Many effectively function as liquidity routers.

A single large account posting about a low-cap project can:

• trigger retail inflows,
• create trending discussions,
• activate algorithmic visibility,
• attract copy traders,
• and generate enough momentum for price expansion.

This creates a dangerous feedback loop.

Projects increasingly optimize for influencer exposure instead of product quality because attention has become a monetizable infrastructure.

The incentive is obvious:

• building takes years,
• Virality takes one tweet.

As a result, some teams prioritize:

• aesthetic branding,
• meme creation,
• engagement bait,
• rage farming,
• and influencer partnerships

over actual protocol development.

And honestly? The market often rewards them for it.

Engagement Farming Is the New Yield Farming

A few years ago, crypto users farmed liquidity incentives.

Today, many farm impressions.

CT (Crypto Twitter) evolved into an economy where attention itself has financial value:

• more visibility = more followers,
• more followers = more influence,
• more influence = more deal flow,
• More deal flow = more monetization opportunities.

This changes user behavior dramatically.

People post extreme predictions because outrage spreads faster.
They recycle bullish narratives because optimism attracts engagement.
They post “alpha” threads because authority converts into social capital.

In some cases, traders are no longer analyzing markets.

They are analyzing what other people will pay attention to next.

That’s a completely different game.

Memetic Momentum Is Stronger Than Logic

Memes simplify complexity into emotion.

And markets move emotionally far more often than people admit.

A meme coin with:

• strong branding,
• recognizable humor,
• viral community culture,
• and relentless online presence

can outperform technically superior projects simply because it captures the collective imagination.

Memes spread faster than research reports.
Jokes travel faster than whitepapers.
Identity spreads faster than utility.

This is why memetic momentum became one of the strongest forces in crypto markets.

At scale, attention itself becomes liquidity.

The Attention Economy Created Reflexive Markets

Crypto is uniquely reflexive.

Attention drives price.
Price attracts more attention.
More attention attracts more buyers.
More buyers push the price higher.

This loop continues until attention fades.

Then the reverse happens just as violently.

This explains why:

• dead ecosystems suddenly revive,
• abandoned narratives return,
• low-quality tokens temporarily outperform,
• And fundamentally strong projects can remain ignored for years.

Visibility often matters more than value creation in the short term.

That doesn’t mean fundamentals are irrelevant.

It means fundamentals frequently lose to narrative timing.

The Dangerous Part Most Traders Ignore

Many users believe they are trading technology.

In reality, they are often trading crowd psychology amplified by algorithms.

That distinction matters.

Because once attention becomes the primary driver:

• volatility increases,
• conviction weakens,
• narratives shorten,
• and markets become increasingly emotional.

This environment rewards speed, positioning, and social awareness more than deep technical understanding.

The smartest traders in modern crypto are not just reading charts anymore.

They are reading timelines.

Final Thoughts

Crypto has evolved into one of the purest attention markets ever created.

The winners are not always the best builders.
Sometimes they are simply the best storytellers.

And whether people admit it or not, much of modern crypto speculation revolves around one thing:

Capturing attention before everyone else notices where it’s flowing next.

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Key Takeaways

• Digital stock representations may divide market liquidity, leading to price inconsistencies between trading venues.

• Trading fee income faces potential offshore migration as blockchain venues attract transaction volume.

• Blockchain trading demand accelerates with Hyperliquid showing $2.6B in real-world asset exposure.

• Major exchanges NYSE and Nasdaq build tokenization systems to preserve market dominance.

• Digital equity tokens enable round-the-clock trading, partial share ownership, and worldwide participation.

The Securities and Exchange Commission’s latest innovation-focused exemption permits blockchain-based equity listings on alternative trading platforms. This regulatory shift authorizes the circulation of digital equity tokens representing traditional stocks without requiring company consent. Industry experts caution this development may scatter market depth and redirect transaction revenue from established trading venues.

Market Depth Distribution Challenges

Tokenized stock activity spanning numerous blockchain platforms dilutes order concentration from traditional exchanges. As a result, established marketplaces including NYSE and Nasdaq face potential declines in aggregated transaction volumes. Dispersed market depth can generate pricing inconsistencies and magnify execution costs for institutional-sized orders.

The proliferation of digital equity tokens redirects investment capital toward continuous blockchain trading environments. This evolution may undermine market efficiency standards and diminish the effectiveness of centralized pricing mechanisms. Distributed trading architectures also separate market participants into fragmented liquidity pools, elevating transaction execution uncertainty.

Blockchain-native platforms demonstrate expanding interest, with Hyperliquid documenting $2.6 billion in outstanding positions. The expansion of tokenized real-world asset markets reflects investor demand for uninterrupted market access. This transition compels conventional exchanges to rapidly embrace blockchain-based liquidity frameworks.

Trading Income Distribution Concerns

Transaction fee revenue streams may migrate internationally as digital equity tokens launch on alternative platforms. Conventional exchanges risk losing domestic fee-based income, impacting financial performance and competitive positioning. International fee redistribution could fundamentally alter market power dynamics beyond traditional infrastructure.

The SEC’s exemption framework hastens tokenized equity acceptance, disrupting consolidated revenue structures. Distributed trading diminishes centralized regulatory oversight and traditional exchange-driven market incentives. This evolution presents strategic challenges for both oversight agencies and financial market operators.

Nevertheless, tokenized stocks deliver accelerated settlement processes and reduced transaction expenses. Partial ownership capabilities and international accessibility broaden investor participation opportunities. These advantages particularly attract international investors and stimulate wider blockchain-based equity adoption.

Platform Development and Market Metrics

NYSE and Nasdaq are constructing tokenized equity systems to maintain competitive transaction flow. Strategic partnerships with digital transfer service providers and blockchain networks target settlement standardization. Measured implementation strategies may reduce liquidity dispersion and revenue migration risks.

Analytics from RWA.xyz indicate $1.53 billion in tokenized equity valuation across more than 272,000 token holders. Monthly transfer activity achieved $3.4 billion, demonstrating substantial blockchain trading engagement. These figures suggest tokenized equity markets remain nascent yet experience significant expansion momentum.

Tokenized stocks are fundamentally transforming trading structures and market operations. Liquidity dispersion and revenue migration represent substantial systemic challenges. Regulatory authorities and exchange operators must carefully balance innovation advantages against established market stability requirements.

Polymarket is set to lobby for authorization of prediction markets in Japan, according to a Bloomberg report on Friday.

The decentralized prediction market platform has appointed a representative in the country and is aiming for government approval by 2030, Bloomberg report said, citing people familiar with the matter who asked not to be named.

Mike Eidlin, head of Japan at cryptocurrency exchange Jupiter, is leading Polymarket’s efforts, according to the report.

Polymarket, which allows users to bet on outcomes of real-world events through blockchain-based futures contracts, has been under pressure to expand its reach into other major markets as legal scrutiny has hampered its activity in the U.S.

Read More: India cracks down on prediction markets: Polymarket goes dark, Kalshi could be next

Japan maintains some of the world’s strictest gambling laws, with most forms of betting prohibited under the country’s criminal code. Exceptions exist for state-sanctioned wagering on events such as horse racing and lotteries, while casinos are only beginning to emerge under a tightly regulated framework.

Polymarket has seen “meaningful organic interest from users in Japan,” a spokesperson said, according to Bloomberg’s report.

Japan has also taken a comparatively cautious approach toward crypto-related businesses, with regulators enforcing licensing and consumer protection requirements on digital asset firms operating in the country.

Polymarket did not respond to CoinDesk’s request for comment.

Blockchain investigator ZachXBT has highlighted a suspected security breach involving Polymarket, the world’s largest decentralized prediction market platform.

Over $520,000 was reportedly drained from two smart contracts on the Polygon blockchain, according to on-chain data shared by ZachXBT. The affected addresses are 0x871D7c0f9E19001fC01E04e6cdFa7fA20f929082 and 0x91430CaD2d3975766499717fA0D66A78D814E5c5, with funds allegedly sent to attacker address 0x8F98075db5d6C620e8D420A8c516E2F2059d9B91.

Polymarket developers said the company is aware of reports tied to its rewards payout system in a post on X. The team emphasized that user funds and market resolutions remain safe, describing the issue as a private key compromise of an internal operations wallet rather than a broader smart contract exploit or core infrastructure breach. Further updates are expected.

Polygon Labs’ CTO Mudit Gupta also commented on the incident, stating:
“Polymarket contracts are safe. User funds are safe. Looks like their market initializer was compromised. No impact to the users or the contracts.”

Polymarket has not yet issued an official statement from its main X account. CoinDesk has reached out to the company for additional comment. The incident comes amid heightened scrutiny of decentralized finance platforms.

The ICT Power of 3 is a price action model describing how markets move through three phases: accumulation, manipulation, and distribution. Also called the AMD trading model, it sits within the Inner Circle Trader framework. Traders use it to interpret institutional behaviour and shape their own market analysis. Recognising these phases may help traders assess potential areas of interest and align their strategies with broader market dynamics.

This article outlines the core principles of the Power of 3 framework, providing a detailed examination of how it is applied in the context of institutional order flow and market structure.

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Introduction to the ICT PO3 Trading Model

The ICT Power of 3 was developed by Michael J. Huddleston, better known as the Inner Circle Trader. The model, often referred to as the AMD trading model, divides price behaviour into three phases that repeat across timeframes and instruments. Accumulation builds positions inside a range. Manipulation pushes price beyond that range to capture liquidity. Distribution then drives the directional move that follows.

Traders use ICT PO3 to combine liquidity analysis, smart money concept trading, and market structure inside one framework. The activity these phases describe is typically attributed to institutional investors, whose order flow sits behind larger moves. Power of 3 trading applies to forex and indices, commodities, stocks, and cryptocurrencies*, though liquidity profiles vary between asset classes.

Below, we’ll discuss each of these three phases in more detail. Consider following along on FXOpen’s TickTrader trading platform.

Accumulation Phase (PO3)

The accumulation phase is the first stage of the ICT Power of 3 model. It involves relatively low volatility and sideways price movement, typically near key support or resistance levels. During accumulation, the market ranges within a narrow band as large traders gradually build positions without significantly driving up price.

The range is where liquidity builds. Stop losses cluster just outside the highs and lows, creating the order pools targeted in the next phase.

For example, GBPUSD may stall inside a 30-pip range below a recent swing high for several sessions. That consolidation, with shrinking candle bodies and steady volume, is a typical accumulation setup. The narrower the range, the more compressed the liquidity sitting above and below it becomes.

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Recognising the accumulation phase involves monitoring for typical signs such as:

• Low Volatility: The asset trades within a tight range, showing little directional bias.
• Key Levels: Accumulation often occurs near historical support or resistance levels where the price is deemed under or overvalued by institutional investors.
• Increased Volume: There may be a gradual rise in volume as smart money accumulates positions, signalling their interest without causing sharp price movements.

Accumulation is most often analysed on higher timeframes such as the 4-hour or daily chart, while lower timeframes show the range mechanics.

Manipulation Phase (Liquidity Sweep)

The manipulation phase is a pivotal part of the ICT PO3 trading strategy. This stage is marked by deliberate actions from institutional investors to create market conditions that mislead and trap retail traders. Also called a liquidity sweep or stop raid, manipulation typically occurs around session opens (often London and New York), previous day highs and lows, and equal highs or lows where stop orders tend to cluster.

Signals of the manipulation phase include:

• Stop hunts: Sharp moves beyond the accumulation range that trigger clustered stop loss orders.
• False breakouts: Sudden moves that look like a breakout but reverse back into the range.
• Directional context: In a bullish setup, the sweep typically dips below the range. In a bearish setup, it spikes above.
• Failure to hold beyond the level: Candles close back inside the range rather than extending.
• Movement against higher timeframe direction: Common after a prolonged trend, signalling potential exhaustion.

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These moves create liquidity, allowing larger traders to build positions at more favourable prices. Liquidity sweep trading relies on identifying these reversals once the sweep completes.

For example, on GBPUSD, price may consolidate inside a tight range through the Asian session. At the London open, a sharp dip of around 25 pips clears stops below the range, then reverses back inside within minutes. That sequence is a typical manipulation phase in trading, meaning the engineered move clears liquidity before the real direction emerges.

Distribution Phase (Expansion Move)

The distribution phase is the final stage in the Power of 3 trading strategy, where positions built during accumulation are realised. It is also called the expansion move, since price extends sharply in the intended direction after the manipulation phase completes.

Confirmation signals of the distribution phase include:

• Strong directional candles: Sustained movement with large candle bodies in the expansion direction.
• Market structure break: The high or low of the accumulation range is traded through decisively.
• Volume expansion: Increased volume during the move, indicating active participation.
• Holding beyond the level: Candles close and stay beyond the broken structure rather than reversing back.
• Confluence with higher timeframe direction: The expansion aligns with the broader trend.

Distribution phase forex setups are commonly analysed once a market structure break confirms the move. Traders may use moving averages or support and resistance levels to potentially help confirm the transition.

For example, on GBP/USD, after a manipulation sweep below the Asian range at the London open, price reverses, breaks above the prior range high, and extends 60 pips into the New York session. The market structure break and sustained candles confirm the expansion move is underway.

Applying PO3 in Market Analysis

ICT PO3 is typically applied through a structured workflow that moves from higher timeframe context down to lower timeframe execution. The five steps below outline how ICT PO3 works in practice:

1. Set the daily bias on a higher timeframe (4-hour or daily).
2. Mark the day’s opening price on the chart.
3. Identify the manipulation move beyond the day’s open and range boundaries.
4. Confirm the entry on a lower timeframe (5-minute or 15-minute).
5. Manage the position with stops beyond the manipulation extreme.

Setting the Daily Bias

Traders often start by establishing their market bias for the day. This involves analysing higher timeframes to determine the overall market trend. Understanding whether the market is bullish or bearish sets the foundation for the day’s trading strategy.

The higher timeframe directional context, typically taken from the 4-hour or daily chart, sets the side of the market traders look to align with intraday.

Marking the Day’s Open

After setting the bias, traders mark the opening price of the day. This price point often acts as a reference level for intraday price movements and liquidity analysis.

The daily open often sits close to overnight liquidity pools, and price reactions around this level may reveal whether short-term moves align with the higher timeframe direction.

Identifying Manipulation

Traders look for price movements beyond the day’s open and the established range boundaries. For a long bias, they observe for manipulation below the open, while for a short bias, they look above the open. This stage is important as it indicates where smart money may manipulate the market to create liquidity.

Resting liquidity tends to sit above swing highs and below swing lows, and the manipulation phase typically targets these areas before the expansion move begins.

Entry Confirmation

While a trader can simply enter once price trades beyond the day’s open, many choose to confirm the trade. Using a 5- and 15-minute charts, they might look for signals such as:

• A Change of Character (ChoCh).
• Price rejection at a key swing high or low.
• Candlestick reversal patterns such as a hammer, shooting star, or engulfing candle.
• Momentum slowing in the manipulated direction.

A ChoCh is a break in short-term market structure that may signal a shift in momentum, often appearing as the first lower timeframe sign that the manipulation move is exhausted.

Traders typically place stop losses beyond the manipulation high or low to potentially manage risk here.

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Distribution Phase

If an entry is missed during the manipulation phase, traders can look for entries during the distribution phase. Although this phase may offer a less favourable risk-to-reward ratio, it still may have trading potential. Continuation entries could be taken after a market structure break, ChoCh and a pullback, with stops placed beyond a recent swing point.

ICT Power of 3 Example

The example below illustrates how the ICT Power of 3 (PO3) model may appear on an intraday chart.

Accumulation: On the GBP/USD 15-minute chart, the day open acts as a support level. Price ranges sideways above this level, building liquidity inside a narrow band.

Manipulation: A candle wicks below the range, briefly clearing stops sitting under the swing low. Price then breaks above the range, only to reverse sharply back inside — a clear liquidity sweep across both sides of the accumulation band.

Distribution: On the 5-minute chart, a ChoCh forms as price breaks the downtrend structure. Price pulls back, then breaks above the manipulation high, signalling a bullish expansion move. Subsequent pullbacks may offer entries for traders who missed the initial sweep before price marks up further.

PO3 vs Other Price Action Models

PO3 trading shares ground with other price action approaches but differs in how it interprets price moves around key levels.

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Breakout trading typically treats a move beyond a range as a signal of continuation. ICT PO3 treats the same move with caution, since the manipulation phase often produces a false breakout before the real expansion. Where a breakout trader may enter on the break, a PO3 trader often waits for the sweep to reverse and confirm direction on a lower timeframe.

Trend trading focuses on aligning with the broader directional move. Power of 3 trading incorporates trend context through the daily bias step but adds a structural framework around accumulation and liquidity, rather than relying on indicator-based trend signals such as moving averages or trendlines.

Limitations of PO3

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The PO3 ICT strategy has limitations traders should consider before applying it.

The model is interpretive. Identifying where accumulation ends and manipulation begins involves judgement, and two traders may label the same chart differently. This subjectivity can lead to inconsistent application.

False signals are common. A move beyond a range may resemble a liquidity sweep but turn out to be a genuine breakout, leaving traders positioned against the actual direction. PO3 also performs differently across market conditions: ranging markets tend to produce clearer setups than strongly trending markets, where the accumulation phase may be brief or absent.

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Risk Considerations in PO3 Trading

Stop placement is central to applying PO3. Stops are typically placed just beyond the manipulation high or low, since a return to that level may invalidate the setup. Placing stops too tight inside the range may potentially result in being stopped out by minor noise.

Volatility around session opens, particularly the London and New York opens, can produce sharp moves that extend further than expected. Wider stops may be required during these windows, which means position sizing potentially needs adjustment to keep risk per trade consistent. Pairing PO3 setups with structured risk management may potentially support more consistent execution.

The Bottom Line

Understanding and applying the ICT Power of 3 strategy can support a structured approach to analysing market movements. By identifying the phases of accumulation, manipulation, and distribution, traders may gain insights into potential institutional activity and adjust their decisions accordingly.

Traders interested in applying the model on live charts may consider opening a forex trading account with FXOpen.

FAQ

What Is ICT Power of 3 in Trading?

The ICT Power of 3 (PO3) is a trading strategy developed by Michael J. Huddleston, known as the Inner Circle Trader. It involves three key phases: accumulation, manipulation, and distribution. These phases may help traders understand market movements by aligning their strategies with institutional investors.

What Is the Power of 3 ICT Entry?

The Power of 3 ICT entry involves identifying optimal points to enter trades during the phases of accumulation, manipulation, and distribution. Traders typically look for signs of price manipulation, such as false breakouts, and then enter trades in the direction of the anticipated distribution phase.

How Does the Power of 3 Work?

The ICT Power of 3 can be an indicator of potential smart money involvement. It works by breaking down market movements into three phases:

1. Accumulation: According to theory, smart money is expected to build positions.

2. Manipulation: Traders monitor price movements that extend beyond the day’s opening level and the defined range limits.

3. Distribution: Smart money exits positions, leading to significant price movements in the intended direction.

How Do Traders Use the Power of Three?

Traders use the Power of Three (PO3) to analyse potential market direction through three phases: accumulation, manipulation, and distribution. They typically identify a ranging period, monitor liquidity sweeps beyond key highs or lows, and then look for confirmation that price is moving in the intended direction. Traders may combine PO3 with market structure analysis, liquidity levels, and higher timeframe bias when assessing trade setups.

Is PO3 Suitable for All Markets?

PO3 (the AMD trading model) may be applied to forex, indices, stocks, commodities, and cryptocurrencies*. Setups tend to be clearer in markets with defined session opens and concentrated liquidity, such as major forex pairs and equity index CFDs. In 24-hour markets like cryptocurrency*, accumulation and manipulation phases may form differently due to less defined session breaks, so context matters when applying the model across asset classes.

*Important: At FXOpen UK, Cryptocurrency trading via CFDs is only available to our Professional clients. They are not available for trading by Retail clients. To find out more information about how this may affect you, please get in touch with our team.

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.