When I see large spikes like this in the liquidity, I believe that's from automated LP services or people who constantly change their tight ranges.

This is just like those who change lanes constantly on the highway. 

When some big, but expected, price changes happen, I earn much more APR. So usually if I earn 20% APR on this position, those big price swings yield 200-500% APR for a day or so. 

I'm just less greedy. I'm ok with 2-50xing the S&P 500 lol

Interesting observation! Utilizing automated LP services or adjusting ranges frequently can indeed amplify gains during price fluctuations. It's crucial to find a balance between risk and reward. Your analogy of changing lanes on the highway is spot on. Consistency and calculated decisions seem to be key in navigating these opportunities effectively.