I live in Squirtle Hell, aka Michigan, where Dirtboy (#1 on Anther's Ladder and prospective PR) lives, along with Samn and secondary Squirtles Jawsome, Benji, and Frost. Lots of experience playing this—albeit as Snake—and all but Dirt and Frost say that Squirtle loses to Sheik, so it's really a matter of playing the matchup well. I equate Squirtle a lot to a grounded Melee Jigglypuff—you're not going to be comboing Squirtle a whole lot due to his weight and floatiness, and he's going to be playing super left-right bros a whole lot more than he's playing PM—bobbing and weaving with his really good dashdance options trying to bait moves out. You've got to play defensive and reactionary.
Squirtle's biggest boon is his movement. He will dashdance and shellshift (where he retreats into his shell) until you lose good spacing. Don't let that happen. I'd say platform camp with needles, because I think needles whiff when Squirtle shellshifts and also because your aerials tend to outrange Squirtle's. Once you get a read on how the Squirtle moves, cc down tilt or down smash can eat a lot of his approach options—grabbing him out of his movement is also really free.
As for edgeguarding, Squirtle's UpB covers directly in front of him, so needles won't work, as you've realized. You need to grab ledge, and you need to be quick about it so that your invincibility carries over long enough to protect you from up b—Shino Stall helps here. After that, you can ledgehop bair or nair with invincibility and reset the edgeguard. Alternatively, Squirtle lands with a large amount of lag, so you can punish it relatively freely—ledgehop dair is usually best to set up for a fair or uair. If they aren't sweetspotting, you can literally just crouch under the up b hitboxes and then d-tilt or f-tilt to launch them into a fair.
I think it's really healthy to just grab Squirtle real quick in Training or single player brawl and just see what his moves do. Read some threads on the Squirtle boards and talk with Squirtle mains. The most valuable asset in this game is character knowledge.
Other things to note:
- Sheik's DI mixups off of throws are really important here. If Squirtle DIs away, you have trouble getting any followups due to his floatiness, but if he DIs in, you can get an aerial or a u-smash.
- Watch out for Squirtle's down-tilt. For the longest time, I would get caught by this because it looks like a double down-tilt—really it's a multi-hit down tilt. CC both hits and then punish.
- Squirtles love to cross up with side-b into an aerial, so be wary of that as well. If you can, buffer spot dodge or roll to catch their landing after the aerial. Otherwise, just keep shield and let it go back to neutral.
- Squirtles I've played love techchasing with down smash since it catches tech in place and rolls in. Roll away and punish with boost grab if they do this. This is good in general because of Sheik's very long tech rolls.
