BNB price readies for a breakout as Binance exchange makes foray into NFT lending space

Binance exchange has made its foray into the non-fungible token (NFT) lending space after launching a new feature on its platform on May 25. Based on the announcement, the feature allows users to leverage NFTs as collateral in securing loans.

With the new venture dubbed Binance NFT Loan, the exchange has signed up for competition against industry peers like Blur’s NFT lending protocol, Blend.

Also Read: Binance Coin price action alerts traders that a slide below $300 is forthcoming

Binance NFT Loan

Binance NFT Loan aims to add utility to non-fungible tokens by enabling market participants to use their assets to borrow crypto. It comes shortly after NFT marketplace giant Blue unleashed its NFT Lending protocol christened Blend earlier in May. Nevertheless, unlike Blue, Binance employs a peer-to-pool mechanism, making its platform a loan pool.

From the report, Binance will commence operations with support limited to Ethereum loans and “Blue Chip” NFT collections. These include Bore Ape Yacht Club (BAYC), Mutant Ape Yacht Club (MAYC), Azuki, and Doodles.  The exchange sharing that it has shared its plans to introduce more features in the future, all toward making Binance the go-to place for NFT trading and decentralized finance (DeFi).

An excerpt from a press release by Binance head of product, Mayur Kamat, reads:  

Binance NFT loan feature will provide new liquidity options for holders, allowing them to participate in the market without having to let go of their precious NFTs.

While interest rates will be set at 3.36% per year, Binance will change this to 11% per annum later, alongside a loan-to-value ratio between 40% and 60%. Nevertheless, with the new feature, Binance has revitalized competition within the NFT space while simultaneously revolutionizing NFTs from being simple jpegs to becoming properties capable of serving as collateral. This is a major advancement for the non-fungible token ecosystem, enticing a similar move from other entities.

Binance Coin price gears for a positive reaction

At the time of writing, Binance Coin (BNB) price is gearing for a bounce from the $303 support level. However, bulls must increase their buying pressure to overpower selling pressure from the 200-, 100-, and 50-day Exponential Moving Averages at $308, $313, and $315, respectively. An increase in buying pressure above these levels could see the exchange token shatter the $316 hurdle. A four-hour candlestick close above this level could invalidate the current bearish outlook shared by the broader market.

In a highly bullish case, BNB price could reach higher, tagging the $325 hurdle that denotes a 6% uptick from the current price.

BNB/USDT 4-hour chart

Conversely, if sellers overpower the bulls, Binance coin price could drop toward the $303 support level or even lower to test the significant psychological support at $300, collecting sell-side liquidity underneath.

Also Read: BNB price recovery rally threatened as Binance trustworthiness is questioned