The waters above

1. In Gen 1, there are three divine actions of separation: (i) separating light from darkness and (ii) day from night. Those are interrelated. And (iii) separating the waters above from the waters below. 

2. Many "scholars" think the waters above allude to a celestial reservoir, which the "solid dome" of the sky held back. One problem with that identification is that ancient Israelites were aware of the fact that rain comes from rainclouds. Indeed, depending on you physical vantagepoint, you can see rainclouds emit rain. Moreover, did ancient observers never notice that it only rains when skies are cloudy rather than clear? Did they never notice that it's dry on a clear day, then watch a cloud approach and dump rain? Were they that inattentive to the natural world around them? How would they survive?

3. But we might also consider the symbolic significance of "waters above". Ancient people associated "up there" with God, gods, and angels–while "down below" was the human realm. 

Both sunlight and rain are necessary to sustain human life. In addition, rainwater is drinking water. Very pure. 

Moreover, collected rainwater is safer than venturing down to the riverbank or watering hole, frequented by predators. 

The fact that life-sustaining water comes from above is emblematic of the fact that life and death depend on God's provision. The God "up there" discharges the waters "up there" to make life possible here below. Drought and famine occur in the absence of rain. And even lakes and rivers begin to dry up after a prolonged drought. Water for cooking, drinking, irrigation, game, and livestock becomes scarce. And the Middle East is an arid region to begin with. 

It's natural for ancient people to associate rain with God's celestial abode. God sends rain, or God withholds it. The terrestrial realm relies on the celestial realm to survive and flourish.