Moonwell (WELL) Nosedives 36% From All-Time High, But Developers Remain Bullish

Moonwell, the third-largest lending decentralized application network on the Base blockchain, has experienced a sharp decline, erasing gains made in October.

Moonwell (WELL), a decentralized application network for lending, has seen its gains from October erode amid a broader market pullback.

Moonwell’s native token dropped to $0.07113 on Dec. 15, marking its lowest level since Oct. 25 and 36% below its all-time high. The drop brings Moonwell’s market capitalization to over $226 million. Despite the recent decline, WELL remains 677% higher than its lowest point in July this year.

The lending platform was first launched as a parachain on the Polkadot (DOT) ecosystem, where it saw limited adoption.

Moonwell’s growth accelerated this year after its developers expanded to Base, a blockchain network launched by Coinbase. Since its launch, the AAVE (AAVE) competitor has seen a significant increase in assets on the network. As of December, Moonwell has around $116 million in total value locked in Base’s DeFi networks.

According to Moonwell’s developers, the platform has generated about $800,000 in fees on Base and Optimism since October, indicating strong user growth — a trend that could continue in the near term.

Moonwell experienced remarkable growth in October, generating approximately $800K in fees on @Base and @Optimism.

In the past week alone, Moonwell has generated $185K in fees on @Base, the highest of any lending app on the network.

Throughout the year, Moonwell’s growth has coincided with that of Base, which has rapidly ascended from obscurity to become the sixth-largest chain in the industry and the third-biggest blockchain for decentralized exchanges.

As the broader market continues to correct following a strong rally, some analysts are identifying the pullback as a good entry point for certain assets. In an X post on TradingView, The Weekend Shift estimated that the WELL token will soar to $1.50 by the end of the year, implying a 1,775% surge from current levels.

On the technical price front, the Moonwell token recently reached a high of $0.1122 before declining as investors took profits. The token’s price has dipped slightly below the key support level at $0.080, which also marks WELL’s highest swing on March 24 and the upper edge of the cup and handle pattern.

The two lines of the MACD indicator have formed a bearish crossover, while the Relative Strength Index is approaching the neutral level of 50. The price also remains above the 50-day moving average.

As such, the WELL token could bounce back as it has formed a break and retest pattern, a common indicator of bullish continuation. If this occurs, WELL may rebound and retest the $0.1122 resistance level. However, a break below the 50-day moving average at $0.0576 would suggest further downside.