In a small dry skillet, combine the chile powder, pimentón, and New Mexico chile powder. Stir over medium heat until lightly toasted and fragrant, 1 to 2 minutes.
In a small pan, combine the sugar and water. Stir over medium heat until the sugar has dissolved; bring to a boil. Remove from the heat and let cool.
Put half of the watermelon in a blender and add 1/4 cup of the sugar syrup. Blend until smooth. Set aside. Finely chop the remaining watermelon and put in a medium bowl with the onion, peppers, cilantro, and toasted spices. Grate in the zest of 1 lime. Add the watermelon puree and the juice of 2 limes; taste and add more if needed to balance the flavors. Season with salt and pepper. Refrigerate for at least 1 hour or up to 24 hours.
To serve, spoon into small bowls or glasses. Garnish each serving with cilantro sprigs, avocado slices, and a slice of lime and serve. Makes 6 first-course servings