Walkthrough: After breaking the second seal, the monster will begin tossing exploding shells down upon the waters of the town in all different directions. Since the next seal, the Hot Springs Seal, is found on the opposite side of the beach, be very careful crossing to it. Drop down from the lighthouse back to the tunnel entrance, and then jump to the following smaller island. There will be more Speed Boost Flowers here, so grab them to quickly get across the beach to the Hot Springs.
Unfortunately, as you arrive to the Hot Springs, you will find it submerged under molten lava, making it impassible at first glace. However, there are plenty of Gushens around the island that can be capture using Cappy, the same that will have no problem cleaning up the lava. As you remain a captured Gushen, begin moving into the island. You can use your spin attack to douse the lava in all directions, or you can hover over a specific area and shoot downward to start removing the lava. And as you do, make sure to reach the checkpoint in the middle of the island.
After claiming it, remove the lava on the northern side of the island. By doing so, you should find a small pool that holds some Purple Coins inside. Keep removing the lava until the entire Hot Springs Island is clear of such. Once you have removed the pool of water from the lava, dive in to obtain the very next Power Moon. After you do, hit the button once the the seal is removed. This will open the next fountain, as well as hurt the monster in the process, leaving just one more seal to be destroyed.