Magnetic fields can be a problem. Chains can become magnetized and cause problems when the sensor is on the back wheel.
If the problem consistent or does it just randomly occur? If is is consistent try taking the sensor away from the bike to see if the problem goes away. You could remove the wheel and spin it. Or take the sensor off and rotate it back and forth in your hand.
I really don't know much other than the chain is known to be a potential problem. The rotor is something to consider. Demagnetizers are sold but I don't have any idea about the cost or how well they work. You could try moving the sensor off center away from the rotor if it will stay there. Normally is is recommend to have the sensor on the front wheel since it is closer to the head unit and away from the chain but it wouldn't hurt to try it on the rear.
I am having the same issue after installing a brand new KMC chain. If the chain is in the lowest speed (closer to the sensor), then the sensor will fail. If the chain is in the highest speed (far from the sensor) it works perfectly. The sensor also works perfectly in the front wheel. I've changed the sensor in the rear wheel and I am experiencing the same issue. Any clue? have anyone fixed this?
It sounds like the chain is magnetized. The only options are to put the sensor on the front wheel away from the chain or run the chain through a degausser.
Thanks... yes, when I am outdoor I use the front wheel... however, when I am in the indoor bike trainer the only option is to use the smallest gear in the cassette. I've tried using a magnet to demagnetize, however, it does not work.
Maybe it is some other component in the drive chain that is magnetized. You might be able to install a phone add that will allow you to find where the magnetic field is coming from.