The sinking ship effect has been determined to be due to various causes:
It has been determined that at times the sinking ship effect is caused by bulges on the surface of the ocean.
Lack of Optical Resolution
The sinking ship effect can sometimes be caused by a lack of optical resolution whereby elements of the hull can seem to merge into the sea. This can be reversed with optical magnification.
At other times the sinking ship cannot be reversed with optical magnification. In these cases the cause of the sinking effect is seen to be due to the common inferior mirage which regularly occurs for long periods of time over the surface of water. Over a period of time this sinking effect will disappear, revealing distant bodies.