2002 Ford Explorer Temperature Guage

Hello, On Yesterday While sitting at the bus stop with kids waiting on the bus my heat started blowing luke warm. I got out checked the coolant tank It was very low. I stay in the country with no nearby stores so I added a cup full of water to the tank and crunk the car up and the heat started blowing like normal. This morning on my way to work the heat was on and full blast and I notice the temperature guage was dropping. When I cut the heat of the guage would rise back to normal position. What could be the issue that is causing it to drop when the heat is own?