Place watermelon in a lidded container. Leave in freezer for 30 minutes to an hour OR until chilled (not frozen). This step is optional. If preferred, skip and continue with instructions.
Combine 1/4 cup of sugar and 1/2 cup of water in a large saucepan on top of stove. Stir until dissolved over medium-high heat. About 3 to 5 minutes. Add cold water and lemon juice. Stir together. Set aside.
Blend watermelon until slightly chunky. Or, smooth if preferred. Pour into a large pitcher or punch bowl. Add lemonade. Stir together. Taste. If desired, add more of each ingredient until satisfied.
Fill glasses with crushed ice before adding watermelon lemonade. Serve immediately.
Instead of using ice, chill watermelon lemonade for one hour before serving.