Why did blood and water flow from Christ's side?
Many physicians such as those at the Mayo Clinic, posit that the water was the fluid located in the pericardial sac surrounding the heart:
Clearly, the weight of historical and medical evidence indicates that Jesus was dead before the wound to his side was inflicted and supports the traditional view that the spear, thrust between his right ribs, probably perforated not only the right lung but also the pericardium and heart and thereby ensured his death.
(On the Physical Death of Jesus Christ by William D. Edwards, MD, et al)
It is clear by historical and medical evidence that Jesus was dead before the wound to his side was inflicted and supports the traditional view that the spear, thrust between his right ribs, probably perforated not only the right lung but also the pericardium and heart and thereby ensured his death.
If the spear pierced through the outer pericardium wall and into the heart, then the watery fluid and blood could have poured out through the wound. It emphasizes the reality of Christ's death and His very humanity. The idea of the Resurrection was very important to the early Christian community. Paul specifically wrote: "If Christ has not been raised, your faith is futile and you are still in your sins." (1 Corinthians 15:17)
The blood and water signify two important matters: redemption (blood) and the imparting of life (water). Jesus' redeeming death accomplished redemption for us, giving us the forgiveness and washing away of our sins that we might have life. As we are cleansed by His blood, we can receive more of the divine life by drinking of Him, the fountain of life.
"If you desire further proof of the power of this blood, remember where it came from, how it ran down from the cross, flowing from the Master’s side. The gospel records that when Christ was dead, but still hung on the cross, a soldier came and pierced His side with a lance and immediately there poured out water and blood. Now the water was a symbol of baptism and the blood of the holy Eucharist. The soldier pierced the Lord’s side, he breached the wall of the sacred temple, and I have found the treasure and made it my own. So also with the lamb: the Jews sacrificed the victim and I have been saved by it."
From the Catecheses by St. John Chrysostom , bishop