I'm a newbie. Not sure what you mean by "water level drops". Responding becasue I received a similar symptom because I hadn't tightened (rotated) the strainer clear lid enough, so air was being drawn in through the pump-strainer lid and the water level as viewed thru the strainer compartment lid of my pump dropped pretty quickly.
Essentially, I just purchased a Power flo Matrix 1.5 pump and 18" Hayward sand filter for my 18 ft x 52" fake (metal framed ultra pool). Sick of the under powered pump/filter that came with that pool. Pump and filter were purchased (used for 1 year). Installed and used them for 1 week, no problems. At the first start up after installation, I opened the strainer compartment top, and all the air came out. Retightened the top and used for one week. Just installed a timer a couple fo days ago. Went out to check the system today, and noticed some debris in the pump strainer basket. Shut off the skimmer and return lines, removed the pump strainer lid, removed the debris, and replaced the cap. Becasue the cap is domed, I couldn't remove 100% of air, and when starting the pump (after opening intake and return lines), I noticed the pump strainer compartment empty within 10 seconds. I was searching on the internet to see why, and someone at another site with a similar problem solved their problem by tightening their strainer compartment clear lid (i.e. air was leaking into the strainer compartment through the lid). This stopped air from creeping into the compartment for me (and thus stopped my water level from dropping). I came across your post when I was searching o see if anyone had added a bleed-valve to the domed lids to get all the air out.
Tightening the lid is pretty basic and you probably have already considered it (and checked) but just thought I'd throw it out there (since my pump skimmer compartment looked 'empty' like yours in the above photo). Good luck!
Edited: To replace "skimmer" with "strainer"- Thanks! I also believe it is important to use the appropriate terminology to avoid any confusion, and appreciate the correction!