Bitcoin's (BTC) bullish momentum has hit a snag this week for several reasons , including a weaker stateside demand. Now, the Australian dollar-Japanese yen exchange rate or the AUD/JPY pair, the classic risk barometer, has turned south again, signaling caution to risk asset bulls.

The Australian dollar (AUD), a commodity currency, is a proxy for global economic health, particularly for emerging markets and China. On the other hand, the Japanese yen (JPY) is seen as a safe-haven currency that investors turn to during times of stress. Thus, a decline in AUD/JPY is considered a risk-off signal.

Matt Simpson, an analyst at The City Index, summed it up in his analysis as follows: "As AUD/JPY is a classic barometer of risk, we should take note that all is not looking well around current levels. If AUD/JPY tanks, it’s likely to be followed by risk in general."

A crypto bull might brush off the FX drama as a non-event, particularly against the backdrop of BTC's recent meteoric rise close to $100,000, but history suggests otherwise.

Remember late July and early August? The Japanese yen began rising on rumors that the Bank of Japan (BOJ) was about to hike rates, which it did at the end of the month. The AUD/JPY pair dropped over 8% to 98 in July, hinting at a wave of risk aversion that kicked in during the first week of August.

BTC fell from roughly $70,000 to $50,000 as the yen strength led to traders closing bullish bets in risk assets funded by the cheap JPY-denominated loans. The AUD/JPY pair eventually found a floor at 90 and rebounded alongside other risk assets.

Fast forward to now, the AUD/JPY pair has dipped below the trendline, characterizing its recovery from the early August low of 90. The breakdown points to a renewed strength in the yen accompanied by a growing chatter of a possible BOJ rate hike next month.

If that's not enough, markets are second-guessing the possibility of the Federal Reserve cutting rates by another 25 basis points next month and trade war fears are resurfacing with President-elect Donald Trump's plans to impose the supposedly-inflationary tariffs on Mexico, Canada and China.

"Expectations are growing that the BOJ will raise rates again in December. This comes amid the prevailing view that the Fed will keep rates on hold at the December FOMC meeting," ING said in a note to clients this week, adding it expects the BOJ to lift the benchmark borrowing costs in December.

"On 21 November, [BOJ governor] Ueda left the door open for further tightening, stating that the BOJ would 'decide at each meeting,' fueling speculation of a December rate hike," ING explained.