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Moonwell, the third-largest decentralized lending platform on the Base blockchain, has seen a sharp decline in the value of its WELL token, erasing gains made in October. The token dropped to $0.07113, its lowest level since Oct. 25, marking a 36% decrease from its all-time high. Despite this drop, Moonwell’s market capitalization still stands at over $226 million and is 677% higher than its lowest point in July.
Originally launched as a parachain on the Polkadot network, Moonwell struggled to gain traction. However, its fortunes improved dramatically after expanding to Base, a blockchain established by Coinbase. Since the launch on Base, Moonwell has experienced significant growth, with its total value locked (TVL) in Base’s DeFi ecosystem reaching $116 million.
According to developers, Moonwell has generated around $800,000 in fees from Base and Optimism since October, signaling strong user growth. This trend is expected to continue, fueled by the broader growth of Base, which has rapidly ascended to become the sixth-largest blockchain in the industry and the third-largest platform for decentralized exchanges.
Despite the recent pullback, some analysts view the decline as a potential buying opportunity. In a post on X, The Weekend Shift predicted that the WELL token could surge to $1.50 by the end of the year, representing a massive 1,775% increase.
Moonwell price has strong technicals
The Moonwell (WELL) token recently reached a high of $0.1122 but has since experienced a decline as investors took profits. It has now dipped slightly below a key support level at $0.080, which was the token’s highest swing on March 24 and the upper boundary of its cup and handle pattern.
The MACD indicator has formed a bearish crossover, signaling potential downward momentum, while the Relative Strength Index (RSI) is nearing the neutral 50 level, suggesting indecision in market sentiment. However, the price remains above the 50-day moving average, which could offer some support.
Despite these technical signals, the WELL token has formed a break-and-retest pattern, a common indicator of a bullish continuation. If the token successfully holds above support, it could rebound and retest the $0.1122 resistance level. Conversely, if the price breaks below the 50-day moving average at $0.0576, it would signal further downside potential.
