U Power Plunges 25%—Can Blockchain Battery Swaps Revive Investor Confidence?

Summary
• U Power partners with Shandong Hi-Speed and BOCOM to build 50 battery-swapping stations in Hong Kong
• Stock opens flat at $2.54 but plummets to $1.865 intraday
• 52-week low now equals today’s low at $1.865
• Technicals show RSI at 22.36 (oversold) and MACD at -0.278 (bearish)

U Power’s dramatic intraday collapse has sent shockwaves through the EV sector. Despite a high-profile partnership with two Hong Kong-based energy and finance giants, the stock has cratered from its 52-week high of $9.43 to near its 52-week low. The move defies immediate logic, as the company’s blockchain-driven battery-token model and international expansion plans should logically justify higher valuations. With the EV sector under pressure from Tesla’s -2.19% decline and Ford’s looming low-cost EV gambit, U Power’s sharp drop raises urgent questions about market confidence in its disruptive vision.

Blockchain Ambitions Clash With Market Realism
U Power’s partnership with Shandong Hi-Speed and BOCOM to build 50 smart battery-swapping stations in Hong Kong represents a strategic leap for the company. However, the stock’s 22.44% intraday freefall suggests investors are discounting the news due to skepticism about execution risks and valuation. The company’s dynamic PE ratio of -1.49 (negative due to losses) and 5.9% turnover rate highlight weak fundamentals. While the blockchain-based Battery-Token innovation is novel, the broader market’s bearish sentiment—reflected in the stock trading near its 52-week low—indicates traders are prioritizing caution over speculative optimism.

EV Sector Under Pressure as Tesla and Ford Rewrite Rules
The broader EV sector is grappling with structural challenges. Tesla’s -2.19% decline signals waning demand in the U.S., while Mercedes-Benz’s decision to pause EQ deliveries and cut prices underscores pricing pressures. Ford’s upcoming low-cost EV platform announcement in August adds to the competitive chaos. For U Power, the sector’s struggle to maintain margins amid shrinking subsidies and oversupply exacerbates its own valuation hurdles. The company’s aggressive expansion into Thailand and Portugal contrasts with peers’ defensive strategies, creating a mixed-risk environment.

Navigating the Bear Trap: ETFs and Technicals for a Volatile Play
• 200-day MA: $4.54 (well above current price)
• RSI: 22.36 (oversold)
• MACD: -0.278 (bearish)
• Bollinger Bands: Price at $1.97, near lower band ($2.34)
• Support/Resistance: 200D support at $2.55–2.68, 30D support at $3.76–3.80

U Power’s technical profile shows a classic bear trap scenario. The RSI hitting oversold territory (22.36) typically signals potential rebounds, but the MACD (-0.278) and 52-week low trading suggest a deeper structural bear trend. Key levels to watch include the 200-day MA at $4.54 (a distant target) and the immediate 200D support range ($2.55–2.68). With no options liquidity available, traders should focus on ETFs like the Invesco EV ETF (IVOT) for sector exposure. Aggressive short-termers might consider a bullish calendar spread if the stock breaks above $2.68, but the broader sector weakness and lack of leverage ETFs complicate bullish plays.

Backtest U Power Stock Performance
The backtest of UCAR's performance after an intraday plunge of 25% shows mixed results. While the 3-day win rate is 45.70%, indicating a higher probability of recovery in the short term, the 10-day win rate is lower at 41.39%, suggesting that medium-term recovery is less certain. The 30-day win rate is slightly higher at 46.36%, indicating that longer-term recovery is somewhat more likely. However, the maximum return during the backtest period was only 3.98%, which may be disappointing for investors expecting a strong rebound.

Brace for Volatility: Key Levels and Sector Sentiment to Watch
U Power’s plunge to its 52-week low and bearish technicals suggest further downside is likely unless it breaks above $2.68. Tesla’s -2.19% decline as sector leader amplifies the risk of continued underperformance. Investors should monitor the 200-day MA ($4.54) as a long-term benchmark and watch for follow-through volume above $2.68 to signal a reversal. For now, the bears hold the upper hand—brace for volatility as the EV sector recalibrates. Watch Tesla’s trajectory and U Power’s ability to defend $2.68 as critical near-term triggers.