That lends itself to both sides of the debate, to be fair. You're still in 2nd because you've won enough games and garnered enough points where others have failed.
Goes back to that old adage 'you can only beat what's in front of you'. While in the present it might be hard to gauge your 'true' position, the fact is that you are 2nd and will be in the CL - you won't finish outside top 4 or you'll win EL. So it's a good starting point to build on.
No team other than Man City is probably as good as Liverpool so it depends who you compare your season to.