Kenny Dalglish believes success in cup competitions this season is proof of how the club is progressing.
The Reds are unbeaten in knockout games during 2011-12 and are set to contest their 11th League Cup final against Cardiff City next weekend.
First up is the visit of Gus Poyet's Brighton on Sunday as the sides play for a place in the FA Cup last eight.
Dalglish thinks progress in the cups is evidence that Liverpool are on the up.
He told Liverpoolfc.tv: "The players deserve every credit. They've had a relatively successful season, they've put themselves in a good position.
"This time last year we weren't in both cup competitions and we weren't as close as four points off fourth spot. We're pleased with what we've done so far but we want to push on and improve where we are."
Dalglish could include fit again Maxi Rodriguez on his teamsheet for the tea-time kick-off, while Academy graduates Jon Flanagan and Jack Robinson are also being considered for action.
"The competition has been a bit undermined in recent years, to be perfectly honest," the boss added. "For us, it's a pride you take in your football club - if you're playing a game you want to win it.
"We've played a strong team in both cup competitions but we do have a strong squad. Most of the players in the squad have played a significant part in the cup competitions this year. We'll go out to win the game."
Brighton are currently fighting for a play-off place in the Championship and beat Newcastle in round four of the FA Cup to earn a trip to Anfield.
"We have got a really difficult game coming up on Sunday," said Dalglish. "We've played them already in the League Cup away and we did particularly well on the night to overcome that, but this will be a hard game.
"Although we have the advantage of being at home with fabulous support behind us, we still need to produce the goods on the pitch. Everybody knows what we stand for - we respect the competition and we respect Brighton.
"You can see the form for yourself. They've done well. They're ninth in the league but it's a really tight league. I think there are only eight points between them and top spot.
"They want to play a bit of football, they like to move the ball about and they got a fantastic result against Newcastle in the previous round.
"It's going to be hard for us, we might need to be patient and we'll certainly need to be committed."