Liverpool are favourite for all the competition that they're still in as they're not slowing down but playing very well and defeating every club that they come across. I can't remember last time that I saw Liverpool losing and they're also scoring good goals in all their games. The premier league is theirs already as no club can challenge them. Arsenal that was trying, has just lost the race and can now only try to stay in the top 4 as other clubs are also trying their best to stay consistent in the top 4 position. For the champions league, it'll be very hard for Liverpool as some other stronger clubs are still participating in the champions eague with hopes of winning.
That's how they were favourites in the Emirates FA cup until they were kicked out of it by a low division team. The only competitions I see Liverpool is favourite in is the EFL cup, that's because they're already in the finals and will play Newcastle and the English Premier League. Those are the two competitions I know that they are favourites. As for the Champions League, I really don't see them as favourites. They still have lots of hard huddles to jump before getting to the finals.
Statistically, I think there's no reason not to consider them one of the favorite teams, they've shown better performance than all other Champions League contenders so far. Of course, they have to overcome many obstacles to win the trophy, but isn't that the same for all the other contenders. The reason Liverpool was eliminated from the FA Cup was that Arne Slot didn't take the competition seriously, as evidenced by his starting lineup. Just like their last match in the League Phase, because they were already assured of advancing to the round of 16, Arne Slot rotated most of his players in that match.
Let's see if Liverpool can overcome PSG first, before we talk too much about their chances of reaching the final. I think, with Liverpool comfortable position leading the Premier League standings, they can channel all their energy into performing at their best in the Champions League.