An RFID tag that receives an RF signal from a reader is arranged to derive a threshold signal from a detected envelope of the RF signal, where the threshold signal is proportional to the detected envelope signal. The detected envelope signal is then compared to the threshold signal to derive a digital signal from the received RF signal. By maintaining the threshold signal proportional to the detected envelope signal, false bit detections due to ripple effect on the received signal and interference from other sources are reduced. The threshold signal may be derived employing a switched capacitor attenuator circuit.