Dynamic TWAP Strategy Uses BTC Momentum to Trade Polymarket Prediction Markets

A new algorithmic trading approach combines Bitcoin price momentum with adaptive order execution to exploit short-lived pricing gaps on Polymarket prediction markets. The strategy builds an internal probability model using weighted short-term BTC returns and continuously compares it against the current market ask price to calculate a real-time trading edge. Unlike traditional TWAP execution, which fills orders on a fixed schedule, the dynamic version halts buying immediately when the estimated edge turns negative. In a worked example, the bot stops after purchasing only 150 of a targeted 600 shares once the momentum signal fades and the market price rises to eliminate the advantage. The core design principle is that order size and execution pace are driven by the live signal rather than a predetermined timetable.