"move back and forth," Old English wafian "to wave, fluctuate" (related to wæfre "wavering, restless, unstable"), from Proto-Germanic *wab- (source also of Old Norse vafra "to hover about," Middle High German waben "to wave, undulate"), possibly from PIE root *(h)uebh- "to move to and fro; to weave" (see weave (v.)). Transitive sense is from mid-15c.; meaning "to make a sign by a wave of the hand" is from 1510s. Related: Waved; waving.
I was much further out than you thought
And not waving but drowning.
The "hand motion" meaning is recorded from 1680s; meaning "undulating line" is recorded from 1660s. Of people in masses, first recorded 1852; in physics, from 1832. Sense in heat wave is from 1843. The crowd stunt in stadiums is attested under this name from 1984, the thing itself said to have been done first Oct. 15, 1981, at the Yankees-A's AL championship series game in the Oakland Coliseum; soon picked up and popularized at University of Washington. To make waves "cause trouble" is attested from 1962.