The Federal Reserve just hiked interest rates for the eighth time of this tightening cycle.

Banks again failed to rally. The KBE bank ETF hit session lows in its third negative day in four, while the KRE regional bank ETF fell for its fourth straight session.

Their underperformance this year has them perched at a key critical level and the next move could determine whether it's a boom or bust for the banks, says Miller Tabak equity strategist Matt Maley.

"The thing that concerns me is that not only has it been stuck in a sideways range as the market has rallied all year but now in the last couple of weeks it's dropped below its 200-day moving average. This has been key support for the group," Maley told CNBC's "Trading Nation" on Tuesday.

The KBE ETF, which holds Citigroup and Bank of America among others, broke below its 200-day moving average again earlier this week. It has fallen more than 2 percent since Monday.

"This most recent pullback, it's happening when things should be positive for the group. The broad market is hitting all-time highs, you've got long-term interest rates moving higher, we're even seeing a slight steepening of the yield curve and yet these bank stocks continue to roll back over," said Maley. ""If it pulls further below [its 200-day moving average], that's going to be a big yellow warning flag for the group."

Higher rates expand banks' net interest margins, meaning they make more money on what they lend than what they pay in interest to borrow. A Fed hiking the fed funds rate again, as it's expected to do on Wednesday, would typically help banks.

To Michael Binger, president of Gradient Investments, weakness in the banking sector presents the chance to jump in.

"I think this recent little bit of a sell-off here is an opportunity and we think financials look good as you look forward here," said Binger on "Trading Nation" Tuesday. "Their earnings and profits continue to grow, I think they're increasing their capital returns to shareholders in the form of dividends and buybacks so overall I like this sector."

Banking underperformance has Binger adding to his position in the banks. He owns JPMorgan, Citigroup, and Bank of America.