Trailing 2-0 at half-time, Braves improved greatly in the second half, with Marc Kelly pulling it back to 2-1 before Celtic B scored a third.
Although Cameron Breadner made it 3-2, Braves couldn’t find a leveller.
"They dominated the second half but the game’s 90 minutes,” Waddell told Braves TV. "We went with a game plan and they did half of the game plan in terms of defensively.
"And it wasn’t about us sitting off the game, we wanted to get in Celtic’s faces, we wanted to go and press them.
"We did that in the second half but I felt in the first half we were too far off them, let them play through.
"There’s always that threat when you go and try and press higher against a team of good quality. But we didn’t adjust at the times we should have adjusted so I was disappointed with that.
"At half-time I was annoyed with them so I gave them a bit of a jolt.”
Braves, 11th in the table with 27 points from 19 games, have a home league game against East Kilbride this Saturday, KO 3pm.
Meanwhile – despite a 48th minute Kris Jarvie goal - Bellshill Athletic lost 3-1 at home to Drumchapel United in Saturday’s Strathclyde Demolition Cup quarter-final clash.
’Hill, 10th in West of Scotland League Conference A with 26 points from 19 games, have a home league game against Whitletts Victoria this Saturday, KO 1.30pm.