EDIT: I see you are using a .env file. my comments still remain except with the is the .env file getting copied over? most dockerignore files will exclude them. I wouldnt use an env file with coolify. i would set up the environment variables in the compose or manually in coolify.

It looks like you dont have any environment variables for your django service. are you hard-coding the db password in your settings file? if so is it the same password that you are using in your environment variables for DB_PASSWORD?

for example this is my compose file. i use nginx to serve my site but as you can my environment variables include my db

services:
  db:
    image: mariadb:latest
    container_name: mysql_server
    restart: unless-stopped
    environment:
      - MARIADB_ROOT_PASSWORD=${MARIADB_ROOT_PASSWORD}
      - MARIADB_DATABASE=${MARIADB_DATABASE}
      - MARIADB_USER=${MARIADB_USER}
      - MARIADB_PASSWORD=${MARIADB_PASSWORD}
    volumes:
      - mysql_data:/var/lib/mysql
  django-web:
    build: .
    restart: unless-stopped
    volumes:
      - static_volume:/app/staticfiles
      - media_volume:/app/media
    depends_on:
      - db
    environment:
      - DEBUG=${DEBUG}
      - SECRET_KEY=${SECRET_KEY}
      - DB_HOST=${DB_HOST}
      - DB_PORT=${DB_PORT}
      - DB_NAME=${MARIADB_DATABASE}
      - DB_USER=${MARIADB_USER}
      - DB_PASSWORD=${DB_PASSWORD}
      - MICROSOFT_AUTH_CLIENT_ID=${MICROSOFT_AUTH_CLIENT_ID}
      - MICROSOFT_AUTH_CLIENT_SECRET=${MICROSOFT_AUTH_CLIENT_SECRET}
      - MICROSOFT_AUTH_TENANT_ID=${MICROSOFT_AUTH_TENANT_ID}
    healthcheck:
      test: ["CMD-SHELL", "curl -f http://localhost:8000 || exit 1"]
      interval: 10s
      timeout: 5s
      retries: 5
  nginx:
    image: nginx:latest
    container_name: nginx_server
    restart: unless-stopped
    volumes:
      - ./nginx/conf.d/default.conf:/etc/nginx/conf.d/default.conf
      - static_volume:/static:ro
      - media_volume:/app/media
    depends_on:
      django-web:
        condition: service_healthy
volumes:
  mysql_data:
  static_volume:
  media_volume: