Banana Gun (BANANA) token jumped by almost 20% on Friday

Crypto prices today jumped as investors embraced a risk-on sentiment and others bought the dip.

Crypto prices today rose as investors grew more risk-tolerant and others decided to buy the dips. Banana Gun (CRYPTO:BANANA) token went up by almost 20% on Friday and has risen by over 70% from its lowest level this year.

The gains by the Banana Gun tokens come as the stock market also saw gains. The Dow Jones, Nasdaq 100, S&P 500, and Russell 2000 indices rose by over 1.5%. This was their best day this month and signaled a sharp reversal of what happened earlier in the week as the tariff tantrum continued.

Crypto prices today also went up, coinciding with the gold surge, which reached 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.

3 reasons why Banana Gun, Fartcoin, and PNUT surged

There are three main catalysts for the Banana Gun, Fartcoin (CRYPTO:FRT), PNUT (CRYPTO:PNUT), and Virtuals (CRYPTO:VIRTUALS) 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 consumers and the labor market are the biggest parts of the economic growth. As such, these numbers provide a further signal that the US economy may sink into a recession, which will push the Federal Reserve to intervene.

The Fed has two primary tools to intervene: interest rate cuts and quantitative easing. It will likely signal which tools it might use when it meets next week.

Second, BANANA, Fartcoin, PNUT, and VIRTUALS went up as investors decided to buy the dips since all of them crashed by double digits in the past few months. This concept heightened after Bitcoin (CRYPTO: BTC) price moved above the key resistance at $85,000 for the first time in a few days.

Third, the ongoing altcoins rebound 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.