Imagine you have a bucket of water sitting higher than a ladder. What type of energy would that bucket contain? If that bucket were overturned, what type of energy would the water now contain?

When the bucket of water is at a static position, i. e., sitting high up a ladder, then the water inside the bucket would be possessing potential energy.

Now, from the second case, i. e., where the bucket is overturned, i. e., water flows out of the bucket, now here, the water will have kinetic energy, as it is no more static, the water is flowing.