Liverpool will face Real Madrid at their home ground, so in theory this will be advantageous for Liverpool. Well I think besides the reason that Real Madrid is not in good enough condition, the host status held by Liverpool can also be one reason why people say Liverpool has a greater chance of winning the match. Yes I know that Real Madrid is a team with a good mentality, even though they have to play at their opponent's home ground. However, Liverpool will also definitely learn a lot from how AC Milan beat Real Madrid in the previous match, and at that time AC Milan successfully silenced Real Madrid at the Santiago Bernabeu which we know is very difficult to win there.
Considering Real Madrid's drop in form, combined with the fact that match will be played at Anfield, many people will likely favour Liverpool ahead of the visiting team. However Real Madrid's strong reputation and history in the Champions League along with their attacking players in Vinicius junior, Jude Bellingham, Endrick and Kylian Mbappe makes it very difficult to overlook them. They have the potentials to defeat Liverpool even at home. While Liverpool is also a strong team and a tough opponent, it's unlikely that they would find the encounter with Real Madrid easy. I will bet on both team to score as Real Madrid won't be able to keep a clean sheet and also Liverpool will be unable to stop Real Madrid's attack from scoring.