I went and did a
really crappy edit to try to show some of the things I was trying to explain. To be honest, no offense, but I think you were going the easy way out with the animation as it seems you're only moving pieces of the animation. Anyways, I'm not a good animator, but this is what I was trying to explain, even though I didn't get to include all the things in your original animation.
First, I tried to animate the wave crashing over the previous wave. This seems more natural than wave in, wave out, wave in, wave out, as it has a more flowing, continuous movement.
I also tried to animate the foam of the wave when it crashes, as it not moving seemed really stiff(though I only used two animations for that).
Like someone mentioned before, I thought it was also a good suggestion to have the foam fade away as it fell back. Though on my part I did it cheaply, just having the opacity of the foam lowered each time, I think it'd actually be better if it was animated to slowly bubble away, and will also save colours.
Lastly, I did a poor, and quick job of having the sand get 'wet' and dry up as the sand fell back, as the sand absorbs the water.
EDIT: for references... I can't think of many to show directly, but for anyone who has it, I thought the waves done in Kingdom Hearts, on the island were done pretty well.
