Edward Yardeni is concerned the market will get smoked.

The long-time bull, who spent decades running investment strategy for firms including Prudential and Deutsche Bank, is comparing Wall Street euphoria to the height of the dot-com bubble in 1999.

“The Nasdaq from late 1998 to early 2000 went up over 200%. Now, we’re up almost 100%, and we may very well be on that same track,” the Yardeni Research president told CNBC’s “Trading Nation” on Friday. “Everything I’m looking at points to a melt-up.”

The tech-heavy Nasdaq closed the week at a record high of 13,201.97. Yardeni is also highlighting bitcoin‘s meteoric rise as an example of extreme frothiness. It was up 36% in the first five trading days of the year and is above 300% over the past six months.

“It’s just part of the bull market in everything,” he said. “It’s very important whether you’re in or not in bitcoin to just stare at the chart, and realize when it’s going straight up — it’s certainly a sign of exuberance, of speculative excess.”

Despite his warning, Yardeni isn’t sounding the alarm yet. He’s optimistic on the economic recovery due to coronavirus vaccines and the fiscal and monetary landscape.

“The first half of this year, the blue wave will probably continue to be bullish,” he noted. “We’re going to get more government spending. We’re going to have the Federal Reserve front a lot of that government spending through quantitative easing. I think interest rates will remain pretty low.”

Plus, Yardeni believes widespread distribution of the coronavirus vaccine later this year will help normalize the economy in the final six months of 2021.

But that’s where his forecast gets cautious. A booming economy, according to Yardeni, will lead to inflation risks due to the massive amounts of stimulus and demand increases.

“In the second half of the year, we may be on the lookout for some consumer price inflation which would not be good for overvalued assets,” he said.

According to Yardeni, the Fed may also be challenged to keep the benchmark 10-year Treasury Note yield around 1%.

“We do see upward pressure on the bond yield. I think at some point the Fed says ‘Maybe bond yields should be higher since the economy is doing well,'” said Yardeni.

For now, Yardeni is closely watching fundamentals and market indicators. He hopes they disprove his market melt-up thesis because they typically end in meltdowns.

“This market keeps stampeding ahead of my forecasts,” Yardeni said. “I hope we get to 4,300, my S&P 500 [year-end] target, in a leisurely fashion.”

On Friday, the S&P 500 index closed at an all-time highs of 3,824.68.

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