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

The coin’s near 4% slide in the seven days to Sunday was the largest weekly drop since November, paring its year-to-date gain to 39%.

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 favourable 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. 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 on 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.

Key factor

The payrolls report pushed up US 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.

“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.

Read: Self-proclaimed bitcoin inventor’s R44-billion lawsuit can go to trial

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. — Reported with Sidhartha Shukla, Sunil Jagtiani and Akshay Chinchalkar, (c) 2023 Bloomberg LP