Hello Vijayendra,
Could you give more details on how you are planning to measure the water level?
If your intention is to detect when water reaches certain point, I think that is possible, by placing an electrode on the fixed point and adjust the sensitivity of the PCF8883 to detect the change in capacitance that the water produce. If you want to put the electrode in the bottom and expect a change in capacitance as water rises, that's where I find it difficult because capacitance will remain the same.
Regards,
Darío
