diff --git a/freqtrade/freqtradebot.py b/freqtrade/freqtradebot.py
index 99872ff0b..20fd833eb 100644
--- a/freqtrade/freqtradebot.py
+++ b/freqtrade/freqtradebot.py
@@ -979,10 +979,10 @@ class FreqtradeBot(LoggingMixin):
                   or (order_obj and self.strategy.ft_check_timed_out(
                       'sell', trade, order_obj, datetime.now(timezone.utc))
                       ))):
-                self.handle_cancel_exit(trade, order, constants.CANCEL_REASON['TIMEOUT'])
+                canceled = self.handle_cancel_exit(trade, order, constants.CANCEL_REASON['TIMEOUT'])
                 canceled_count = trade.get_exit_order_count()
                 max_timeouts = self.config.get('unfilledtimeout', {}).get('exit_timeout_count', 0)
-                if max_timeouts > 0 and canceled_count >= max_timeouts:
+                if canceled and max_timeouts > 0 and canceled_count >= max_timeouts:
                     logger.warning(f'Emergencyselling trade {trade}, as the sell order '
                                    f'timed out {max_timeouts} times.')
                     try:
@@ -1079,11 +1079,12 @@ class FreqtradeBot(LoggingMixin):
                                   reason=reason)
         return was_trade_fully_canceled
 
-    def handle_cancel_exit(self, trade: Trade, order: Dict, reason: str) -> str:
+    def handle_cancel_exit(self, trade: Trade, order: Dict, reason: str) -> bool:
         """
         Sell cancel - cancel order and update trade
-        :return: Reason for cancel
+        :return: True if exit order was cancelled, false otherwise
         """
+        cancelled = False
         # if trade is not partially completed, just cancel the order
         if order['remaining'] == order['amount'] or order.get('filled') == 0.0:
             if not self.exchange.check_order_canceled_empty(order):
@@ -1094,7 +1095,7 @@ class FreqtradeBot(LoggingMixin):
                     trade.update_order(co)
                 except InvalidOrderException:
                     logger.exception(f"Could not cancel sell order {trade.open_order_id}")
-                    return 'error cancelling order'
+                    return False
                 logger.info('Sell order %s for %s.', reason, trade)
             else:
                 reason = constants.CANCEL_REASON['CANCELLED_ON_EXCHANGE']
@@ -1108,9 +1109,11 @@ class FreqtradeBot(LoggingMixin):
             trade.close_date = None
             trade.is_open = True
             trade.open_order_id = None
+            cancelled = True
         else:
             # TODO: figure out how to handle partially complete sell orders
             reason = constants.CANCEL_REASON['PARTIALLY_FILLED_KEEP_OPEN']
+            cancelled = False
 
         self.wallets.update()
         self._notify_exit_cancel(
@@ -1118,7 +1121,7 @@ class FreqtradeBot(LoggingMixin):
             order_type=self.strategy.order_types['sell'],
             reason=reason
         )
-        return reason
+        return cancelled
 
     def _safe_exit_amount(self, pair: str, amount: float) -> float:
         """
diff --git a/tests/test_freqtradebot.py b/tests/test_freqtradebot.py
index d7b47174b..d433998a1 100644
--- a/tests/test_freqtradebot.py
+++ b/tests/test_freqtradebot.py
@@ -6,7 +6,7 @@ import time
 from copy import deepcopy
 from math import isclose
 from typing import List
-from unittest.mock import ANY, MagicMock, PropertyMock
+from unittest.mock import ANY, MagicMock, PropertyMock, patch
 
 import arrow
 import pytest
@@ -2220,9 +2220,14 @@ def test_check_handle_timedout_sell_usercustom(default_conf_usdt, ticker_usdt, l
 
     et_mock = mocker.patch('freqtrade.freqtradebot.FreqtradeBot.execute_trade_exit')
     caplog.clear()
-
     # 2nd canceled trade ...
     open_trade.open_order_id = limit_sell_order_old['id']
+
+    # If cancelling fails - no emergency sell!
+    with patch('freqtrade.freqtradebot.FreqtradeBot.handle_cancel_exit', return_value=False):
+        freqtrade.check_handle_timedout()
+        assert et_mock.call_count == 0
+
     freqtrade.check_handle_timedout()
     assert log_has_re('Emergencyselling trade.*', caplog)
     assert et_mock.call_count == 1
@@ -2564,13 +2569,17 @@ def test_handle_cancel_exit_limit(mocker, default_conf_usdt, fee) -> None:
     send_msg_mock.reset_mock()
 
     order['amount'] = 2
-    assert freqtrade.handle_cancel_exit(trade, order, reason
-                                        ) == CANCEL_REASON['PARTIALLY_FILLED_KEEP_OPEN']
+    assert not freqtrade.handle_cancel_exit(trade, order, reason)
     # Assert cancel_order was not called (callcount remains unchanged)
     assert cancel_order_mock.call_count == 1
     assert send_msg_mock.call_count == 1
-    assert freqtrade.handle_cancel_exit(trade, order, reason
-                                        ) == CANCEL_REASON['PARTIALLY_FILLED_KEEP_OPEN']
+    assert (send_msg_mock.call_args_list[0][0][0]['reason']
+            == CANCEL_REASON['PARTIALLY_FILLED_KEEP_OPEN'])
+
+    assert not freqtrade.handle_cancel_exit(trade, order, reason)
+
+    send_msg_mock.call_args_list[0][0][0]['reason'] = CANCEL_REASON['PARTIALLY_FILLED_KEEP_OPEN']
+
     # Message should not be iterated again
     assert trade.sell_order_status == CANCEL_REASON['PARTIALLY_FILLED_KEEP_OPEN']
     assert send_msg_mock.call_count == 1
@@ -2589,7 +2598,7 @@ def test_handle_cancel_exit_cancel_exception(mocker, default_conf_usdt) -> None:
     order = {'remaining': 1,
              'amount': 1,
              'status': "open"}
-    assert freqtrade.handle_cancel_exit(trade, order, reason) == 'error cancelling order'
+    assert not freqtrade.handle_cancel_exit(trade, order, reason)
 
 
 def test_execute_trade_exit_up(default_conf_usdt, ticker_usdt, fee, ticker_usdt_sell_up, mocker