Quote Originally Posted by Mjolinor View Post
Why use capacitance when resistance will probably give you better, more repeatable and stable results?

If you use resistance and a Wheatstone bridge with one fully submerged for a reference and one that gets progressively covered as the depth increases then you have it sorted and stable. Capacitance will vary with location and even your proximity but resistance will not.
I had originally suggested a variable resistor, however much of the community were more in favor of a variable capacitor