"I don't think we could take out of our minds the game against Liverpool,” said Pellegrini. “That's why the team did not play well today (Wednesday).
"It was difficult for the players to get Liverpool out of their minds. We needed more intensity, but maybe it wasn't in their minds to do it.
City needed to win the first of their two games in hand on Liverpool to keep the pressure on the league leaders and second-placed Chelsea.
But Wednesday's draw with Sunderland, in which they needed a late equaliser from Samir Nasri just to avoid defeat, means that they are still six points behind Liverpool with just one extra game to play.
Pellegrini hopes that wins in City's five remaining fixtures will still give them a chance.
"Of course our chances are less than before the match," he said.
"It was very important for us to win this match. We could not, but we will continue fighting until the end.
"Before the match I was very worried, because when you play against a team that might be relegated at the end of the season, they come and fight for every ball like it's the last."
The injury suffered by Yaya Toure at Liverpool also had an impact as his absence was clearly felt in City's midfield, along with that of David Silva.
Silva was ruled out with an ankle problem, but Pellegrini hopes the playmaker will be fit to face West Bromwich Albion next Monday.
‘We deserved something’
Sunderland manager Gus Poyet was delighted by his players, who hit back through Wickham's brace after Fernandinho had given City a 2nd-minute lead.
“We played a great game and deserved something,” said Poyet. “I thought for a few minutes it was going to be all three points.”
“The situation we are in, bottom of the table and we concede a goal after two minutes. Everyone would have expected us to collapse, but we didn't.” AFP
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