(Bloomberg) -- Bitcoin’s 2023 rally is stalling after coming tantalizingly close to forming a trading signal last seen when the token was setting records.

The coin’s near 4% slide in the seven days through Sunday was the largest weekly drop since November, paring its year-to-date gain to 38%.

Bitcoin remains on the cusp of a golden cross, where the 50-day average price tops the 200-day. This pattern occurred before bull runs in 2020 and 2021.

“Most instances of a golden cross have resulted in favorable returns for Bitcoin, and many have occurred at critical long-term inflection points,” Sean Farrell, Fundstrat Global Advisors’ digital-asset strategy head, wrote in a note.

Over the past five years, Bitcoin rose an average 22% in the 60 days after a golden cross, according to data compiled by Bloomberg. But the glaring difference between the easy-money era of 2020 and 2021, when some crosses preceded rallies to all-time highs, and the current backdrop is that central banks are hiking interest rates to fight inflation. 

A blowout US jobs report Friday dented expectations that such policy tightening will soon end and perhaps reverse this year, dovish bets that had powered a January revival across global markets. That rally swept up large and small tokens alike — ranging from Bitcoin and Ether to Axie Infinity and Decentraland.

The payrolls report pushed up Treasury yields, which have been a key factor in influencing demand for riskier investments, according to John Toro, head of trading at digital-asset exchange Independent Reserve.

‘Higher Yields’

“If it remains true that the bond market continues to be leading for risk assets, the cryptocurrency market may take a breather until risk assets have appropriately repriced for higher yields,” he said.

The digital-asset industry also faces ongoing challenges from the fallout of last year’s deep rout and the collapse of businesses like the FTX exchange. 

Thousands of jobs have been lost this year alone, most recently 83 layoffs at crypto platform Bittrex and about a fifth of the workforce at Protocol Labs, the developer of the Filecoin token.

Data collated by CoinGecko indicates that crypto-sector layoffs in January — at almost 3,000 — were the highest in the past year aside from June 2022 during the aftermath of the $60 billion wipeout of the TerraUSD ecosystem. 

Bitcoin, the largest token by market value, was little changed at $22,800 as of 6:45 a.m. in London on Monday. Second-ranked Ether was also steady. Smaller coins like Cardano and Polkadot oscillated between gains and losses.

--With assistance from Sidhartha Shukla, Sunil Jagtiani and Akshay Chinchalkar.

©2023 Bloomberg L.P.