Code help needed for project

No. Which values can Liquid have? In your code, you seem to be trying to cater for 3 states; Liquid can only display 2 states and your description also only mentions 2 states (s far as I understand it.

So that part of the code could be

  if (Liquid == 1)   {
    digitalWrite(greenPin, HIGH);
    digitalWrite(bluePin, LOW);
    digitalWrite(redPin, LOW);
    Serial.println("Monitoring");
    lcd.clear();
    lcd.setCursor(1, 0);
    lcd.print("Monitoring");
    noTone(2);
  }
  else
  {
    (switch_pinstate == LOW);
    digitalWrite(bluePin, HIGH);
    digitalWrite(redPin, LOW);
    digitalWrite(greenPin, LOW);
    Serial.println("Bypasssed!");
    noTone(2);
    lcd.clear();
    lcd.setCursor(1, 0);
    lcd.print("Bypasssed!");
    delay (500);
  }

But you have another input pin that you don't use; maybe you should make use of that as well to influence the flow of your program.

Note:
Seeing digitalRead(), are you using pull-up or pull-down resistors? If they are not on the 'sensors', your inputs can be floating and just give random values.