Solana price drops 25 percent after divergence: can SOL recover?

Solana (SOL) price has declined since its annual high of $32.13 on July 14. The decline confirmed the horizontal area at $27 as resistance. Weekly analysis of SOL price reveals a decisive breakout of a long-term resistance line at the beginning of July.
Solana price surpassed long-term resistance!
Such breakouts usually indicate the end of the previous trend and mark the beginning of a new uptrend. As a result, it seems likely that the price of SOL started the uptrend reversal. If this is indeed the case, we can expect SOL to gradually rise to its previous highs.
It is important to note that the price of SOL failed to break past the horizontal area of $27, resulting in the formation of a long upper wick (red icon) which indicates selling pressure and confirms the $27 area as a strong resistance.
To support the legitimacy of the breakout, we can look at the weekly Relative Strength Index (RSI), a tool commonly used by traders to assess market momentum and identify potential overbought or oversold conditions that affect their trading decisions.
Notably, the RSI has made a higher low and is currently positioned above 50. Last week's close above 50 (green icon) marks the first time this has happened since the end of 2021. However, a convincing SOL breakout from the $27 horizontal area will be crucial to confirm the possibility of a bullish reversal.
LEFT price prediction: divergence may signal bearish action!
The technical analysis on the weekly time frame shows bullish signs while the daily time frame shows bearish signs. The main reason for this is the divergence above the $27 resistance area (red circle) followed by a drop below it. These divergences are considered bearish signs and often lead to sharp downward moves.
After the divergence, the SOL dropped as low as $22.73 but is currently trading near $24. The daily RSI is at a crucial level as it is trading just above the 50 line. Movements above or below this line can help determine the direction of the future trend.
A decisive RSI bounce and price increase above $27 will mean that the trend is bullish. In this case, the altcoin price could move to the next resistance at $46, an increase of 93 percent from the current price.
However, if the altcoin price continues its descent, a drop to the long-term ascending support line at $16.50 is likely. This would mean a 31 percent decrease.
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