Anyone using Polymarket odds as a leading indicator for crypto trades?
I've been going down a rabbit hole the past few weeks trying to figure out if prediction market data is actually useful as a trading signal, or if it's just another noise source. The basic idea is pretty simple: if Polymarket odds on something like "ETH above $X by September" start shifting hard before price moves, that crowd-sourced probability might be front-running the spot market.
So I started cross-referencing Polymarket odds shifts with on-chain data (whale wallet movements, funding rates) and crypto Twitter sentiment on the same topics. The results have been... interesting. Not a magic formula by any means, but there were a few cases where a big move in prediction market odds preceded a 4-6 hour move in spot by enough to at least flag something was happening.
What really got me curious though is the discrepancy between platforms. Polymarket and Kalshi sometimes have equivalent markets priced differently, and tracking where those gaps open and close adds another data point. I found a tool called Surf that actually does cross-market matching between the two platforms automatically, which saved me from manually comparing odds in spreadsheets like some kind of degenerate accountant. It also lets you query the underlying trade data with SQL if you want to dig into whale positions on specific markets, which I didn't expect.
The thing I'm still trying to figure out is how much of the signal is just correlated noise vs. genuinely predictive. Prediction markets aggregate a lot of informed capital, especially on Polymarket where some of the big wallets clearly have edge. But the sample size of crypto-specific markets is still pretty small compared to political or sports betting markets, so it's hard to draw strong conclusions.
For anyone who trades actively: do you factor prediction market data into your process at all, or do you think it's mostly redundant if you're already watching on-chain flows and sentiment?