Crypto Trend-Following on Polymarket Crypto Price Markets (5-Minute Timeframe)

How It Works Polymarket lists markets on crypto price outcomes (e.g., 'Will BTC close above $70,000 on June 30?'). This bot applies a 5-minute trend-following model to BTC/ETH spot price data, using the directional momentum of the underlying asset as a signal for the probability that threshold markets will resolve YES or NO. When spot price momentum is strongly directional, the market's implied probability often lags, creating a tradeable edge.

Entry Conditions The 5-minute timeframe suggests a high-frequency signal generation cycle. The bot likely computes a momentum indicator (e.g., EMA crossover, RSI, or rate-of-change) on BTC or ETH spot prices, then checks whether the Polymarket implied probability has updated to reflect the new directional information. A trade is entered when the implied probability diverges from the model's estimate by more than a threshold.

Exit Conditions Given the 5-minute cycle, the bot may exit positions intraday if momentum reverses, rather than holding to resolution. The dashboard repo (`rexlau-prog/pm-crypto-trend-dashboard`) suggests active monitoring and potentially active position management.

Verified Results & Implementation Notes The existence of a separate reporting dashboard (`pm-crypto-trend-dashboard`, 1108KB) suggests the strategy is being actively run and monitored, which is a quality signal above pure speculation. The IanSmith2005/polymarket-dashboard repo also mentions a 'BTC/ETH arb bot live dashboard', potentially a related or competing implementation. The 5-minute granularity is aggressive for prediction markets, which have slower order books than spot exchanges.

Risks Polymarket's order book is far less liquid than spot crypto markets, meaning large momentum moves may already be priced in by the time the bot acts. Slippage on entry/exit in thin markets can eliminate the edge. The connection between spot 5-minute momentum and binary outcome probability is theoretically weak for long-dated markets — the edge is stronger for very near-term resolution markets.