The Sign of the Cross existed in both the East and the West long before Protestants even came on the scene. It was not meant to distinguish Catholics.
Protestantism arose almost 1500 years after the founding of the Church, and because Protestantism is very similar to Islam in rejecting traditional images and symbols, it was the Protestants who rejected the Sign of the Cross.
We were always complimented when in a restaurant, making the Sign of the Cross (yes, all five children and mom and dad) and saying the Prayer before Meals.
People would always stop by our table and say how impressed they were with our family.
I would say much of Protestantism embraces the Iconoclastic heresy which was condemned in 787AD at 2nd Nicea. Even before that, Pope Gregory III condemned the iconoclastic movement around 731 [which would be affirmed at the 7th Council in 787AD]. Saint John Damascene, the last of the Church Fathers, wrote against the Iconoclastic supporters. If you read the canons and decrees from 2nd Nicea in 787, one clearly sees that rejection of icons was seen as an attack on the Doctrine of the Incarnation [of which both Jews and Muslims reject]. And while Protestantism does not reject it, you still have a segment of Protestantism that has Nestorian tendencies, which I can attest to given my time here and comments made by numerous FR protestants in thread and after thread.
http://www.papalencyclicals.net/Councils/ecum07.htm
Angelicans Lutherans make the sign. Both Protestant faiths.