In order for the Irishman to win, Bisping believes he must look to counter with his dangerous, heavy left hand.
"Conor is the total package. His straight left hand has been the money shot his whole career. Key one, he needs to look for counters. Alvarez is going to be coming forward in this fight. Eddie is going to go for takedown as well and Conor has to defend the takedowns. Finally, he's got to be unpredictable. He's got so many weapons. If he uses them all, he might just win the fight."
In the other two title contests, welterweight champ Tyron Woodley takes on Stephen Thompson, and Joanna Jedrzejczyk defends the women's bantamweight crown against fellow Polish fighter Karolina Kowalkiewicz.
Bisping, the leading British mixed martial artist in history, added: "How can the champion be the underdog? The champ gets it done here."
"He'll close the distance and gets past the kicks. If you take the kicks away, and it becomes wrestling match, Tyron is the better fighter. He closes the distance, gets the takedown and wins the fight."
On Jedrzejczyk, he added: "I'm going with Joanna. She's just too good. Karolina is just a downgraded version of Joanna. But she's not on the same level."
On the event itself, Bisping added: "To quote the new President, it's huge! This is where the legendary fights happen. You haven't made it until you hit New York and Madison Square Garden."
UFC president Dana White believes the event will be special: "New York is always a rowdy, fired up place with a ton of energy. I expect this to be an iconic event. It'll be one of the greatest live fights ever in Madison Square Garden history. For us to put on an event, and to become part of the history and legacy, it's pretty surreal. It's awesome."