Crypto prices today jumped as investors embraced a risk-on sentiment and others bought the dip.
Banana Gun (BANANA) token jumped by almost 20% on Friday and has increased by over 70% from its lowest level this year.
Fartcoin, a popular Solana meme coin, jumped by over 21%, while Peanut the Squirrel (PNUT) and Virtuals Protocol (VIRTUALS) soared by over 20%.
These tokens’ jumps coincided with the stock market’s performance, where the Dow Jones, Nasdaq 100, S&P 500, and Russell 2000 indices surged by over 1.5%. This was their best day this month, marking a sharp reversal of what happened earlier this week as the tariff tantrum spread.
Crypto prices today also jumped, coinciding with the gold surge, which hit the crucial record of $3,000 for the first time ever. The US dollar index (DXY) and US bond yields slipped modestly during the day.
Why Banana Gun, Fartcoin, PNUT, and Virtuals Surged
Three main catalysts exist for the Banana Gun: Fartcoin, PNUT, and Virtuals prices surge. First, a report by Michigan University said that US consumer confidence dropped sharply this month.
This drop is a red alert for the economy since they account for the biggest part of economic growth. As such, these numbers provide further signal that the US economy may sink into a recession, which will push the Federal Reserve to intervene.
The Fed has two primary intervention tools: interest rate cuts and quantitative easing. When it meets next week, it will likely signal which tools it might use.
Second, BANANA, Fartcoin, PNUT, and VIRTUALS jumped as investors bought the dip since they all crashed by double digits in the past few months. This concept intensified after Bitcoin price moved above the key resistance at $85,000 for the first time in a few days.
Third, the ongoing rebound in altcoins could be a sign of a dead cat bounce (DCB). A DCB, also referred to as a bull trap, occurs when an asset that is crashing bounces back briefly and then resumes the downward trend.
The notion of a DCB persists if these altcoins remain below their 50-day moving average.
The bonus reason why these tokens are rising is that the US may avoid a government shutdown. Chuck Schumer, the head of the Democrats in the Senate, has asked to vote for the bill, arguing that a shutdown will empower Elon Musk and Trump to slash more government spending.
