There is inotifywait which seems to do the job, The Wiki

After some suggestions to check out inotifywait I ended up with a solution that works for me as desired.

inotifywait --event modify,create ./targetfolder/; echo "new change, that I am interested in, occurred in targetfolder";

It turned out I was interested in both file modification and file creation events.

As another commenter said, you want inotifywait:

https://linux.die.net/man/1/inotifywait

Maybe inotify or one of those "watcher" (not "watch") tools available, but I don't remember which one to use.

The simplest solution is entr, I use it a lot for development - https://www.linuxbash.sh/post/entr-rerun-commands-when-files-change

What is the end goal?

Block execution not entirely. You could chmod it as non-x and use inotifywatch to flip it back.

Edit: I misunderstood you, use inotifywait like the other person suggested.

Can continuously loop over the file, examine the md5 hash for changes.

Run the script if it has changed.

https://stackoverflow.com/questions/6475252/bash-script-watch-folder-execute-command

daemon() {
chsum1=""

while [[ true ]]
do
    chsum2=`find src/ -type f -exec md5 {} \;`
    if [[ $chsum1 != $chsum2 ]] ; then           
        if [ -n "$chsum1" ]; then
            compile
        fi
        chsum1=$chsum2
    fi
    sleep 2
done
}