The main problem is that when your animation goes from the 4th frame back to the first frame, the waterfall appears to go back up a bit.
You should be able to see this if you step slowly through the animation.
For looping animations, remember that the difference between the last frame and the first frame should be similar to the difference between the first and second frames.
Your water pattern repeats approximately every 24 pixels downwards, so you want it to move 24 pixels in one loop
For four frames, you should have:
frame 1: start position
frame 2: +6 pixels down from start
frame 3: +12 pixels down from start
frame 4: +18 pixels down from start
If you were to than add a frame 5, it would be 24 pixels down from the start. But that would make it look just like frame 1, so we're good to loop back to frame 1 instead of adding a fifth frame.
Quite & dirty edit (I've just copy-pasted part of the first frame over the other 3 frames to show the spacing)