The bond market has been experiencing weakness, leading to media narratives of the “loss of US exceptionalism” and the “end of the debt bubble.” However, there are signs of a bullish setup for investors as bonds have been basing since January and forming a bullish pattern. Additionally, support for bond prices is building due to a strengthening dollar, which could lead to higher bond prices. With exuberance in the stock market, a rotation into undervalued assets like bonds may be on the horizon.

The US Dollar remains dominant in global markets, with a 48% share of global payments and almost 60% of global FX reserves. Despite calls for the dollar’s demise, there is no viable replacement due to the US economy’s size and the liquidity of US financial markets. The graph shows the logic behind a Ponzi scheme in Bitcoin, where fund flows and prices are statistically correlated. As long as funds continue to accumulate, the Ponzi scheme will work, but any selling could lead to a spectacular reversal.

Read more at Investing.com: Long Duration Bonds Could Be Poised for a Bullish Rebound