The rapid growth of the Bitcoin network has revealed important scalability issues which include processing fees, slow processing time and restricted capacity to accommodate large number transactions. While attempting to solve these problems, different Layer 2 solutions like State Channels, Sidechains, Rollups, and Plasma emerge; however, these solutions come with added complications, risks in terms of security, and long time taken to obtain transaction finality, thereby making it unrealistic to apply these solutions consistently in daily use. This paper introduces, therefore, Enhanced Payment Channels with Dynamic Liquidity Management as a new scalable Layer 2 solution that can adapt the balances of the payment channels to the real-time transaction volume. This feature saves users from locking up too much capital or even constantly keeping an eye on their channels so that the funds are optimally used. In addition, it offers instantaneous transaction clearance, a drawback with models such as Rollups and Plasma, coupled with minimal computational cost, and security provided by the Bitcoin chain. Preliminary demonstration shows approximately a couple of times increase in the TPS, and improved UX hence this measures this solution as a step forward in the quest to scale Bitcoin and make it acceptable for normal use.