Heat the olive oil in a large pot over medium heat. Add the diced onion and cook until softened, about 5 minutes.
Stir in the minced garlic and diced bell pepper, cooking for another 3-4 minutes until fragrant.
Add the chicken breasts to the pot, followed by the diced tomatoes with their juice, chicken broth, chili powder, ground cumin, smoked paprika, salt, and black pepper.
Bring the mixture to a gentle boil, then reduce the heat and simmer for about 20-25 minutes, until the chicken is fully cooked.
Remove the chicken from the soup and shred it using two forks. Return the shredded chicken to the pot and stir in the chopped cilantro.
Taste the soup and adjust seasoning if necessary. Serve hot, garnished with tortilla strips, diced avocado, and a wedge of lime if desired.