Manchester City midfielder Ilkay Gundogan admits Pep Guardiola's side are struggling to deal with "negative events" during the run-in.
City, aiming for an unprecedented quadruple, are two points behind Premier League leaders Liverpool with a game in hand.
With less than five weeks of the top-flight season to go, any slip could prove crucial for either side with the Reds seeking a first championship since 1990.
Xherdan Shaqiri's new snub, Torres makes Anfield mark and other Liverpool moments missed vs Porto
City's hopes of Champions League glory suffered a major setback when they were beaten 1-0 at Tottenham Hotspur in the first leg of their quarter-final on Tuesday.
Sergio Aguero saw a penalty saved by Tottenham goalkeeper Hugo Lloris in the first half after Danny Rose was controversially adjudged to have handled inside the box.
And Gundogan believes City, who were eventually undone by Heung-min Son's late strike, were adversely affected by the miss.
"Negative events like that always set us back far too much," he said. "Had we scored from the penalty we'd have taken Tottenham apart.
"But instead we withdrew from the game. That must not happen to a big team. That's why we're not there yet."
Speaking to Sky Deutschland, Gundogan added: "We were not brave enough in the game and we made a lot of simple mistakes.
Keep up to date with all the reaction to Liverpool's win against Porto here
"I have the feeling we are nervous in important Champions League games. We always make the wrong decisions.
"In these matches we always want to do something special because it means (going through to the) Champions League semi-finals. Sometimes less is more."
