There's a tutorial for a paracord water bottle holder on Knifeforums, that I followed to make this one. I used 1/8" Cool Glow Stuff! cord for this project.
*CoolGlowStuff.com is gone as a source for this cord, but there is glow-in-the-dark paracord that has since become available.
I started differently and used another knot than in the tutorial, but in the end, using the shown overhand knot method or your own variation will make a decent water bottle holder.
I wanted the bottle to stand, so instead of a large overhand knot with all four 48" strands used for the net, I looped the center of each onto a small brass split ring for a lower profile.
wikipedia) for the individual knots. A fifth cord of 48" was used to run around the top knots when finished and cinch them tight around the bottle neck and tied a square knot to hold it(any number of knots could be used here) and finished the loop by knotting the two ends together.
A couple of photos show how the individual knots are tied.
And one done for a common half liter water bottle, with 1.4mm cord , overhand knots, and a carabiner to clip to a belt loop.
Another done with 550 paracord in the overhand knot method.