I think champions league elimination caused a lot of harm on Liverpool's performance. The game against Newcastle United was also very important to them to have won but it's not as important as champions league because they put all their minds on it and not only them, almost 85% of football fans where expecting to see them to lift up the Champions League trophy due to their recent performance in the competition. To honest Liverpool have secured a very good opportunity this season because they always appear very strong in all of the competitions they are playing but unfortunately, they only make it in one which is premier league. I'm full of confidence in that aspect because the points interval is not a joke, for Arsenal to have hope of winning the league now that means Liverpool have to lose like four matches which I think is not possible. They are left with 9 matches to end the season, if they could win 6 match out of this, the title is for them.
Liverpool could be very happy with the Premier title they are getting, but losing to PSG still left a bad taste in everyone's month. I am pretty sure people will be quite upset over that for a while longer and if they keep on making these stupid mistakes then they could even lose the title at this point. Obviously things aren't easy at UCL, because winning that is tough, but they are a better team than PSG, so they should have been able to win.
But for both games, they played worse than PSG, and nobody understood why. Sure they won the first game, but even when they were winning, they looked bad. With Salah and TAA leaving next year, and potentially VVD too, they will face a lot more issues, so they had one good shot this year.