Newcastle and Manchester United dropped points at the weekend to give Liverpool a boost in the Premier League top-four race.
The Reds, who recorded a goalless home draw against Chelsea last Saturday, are ninth in the Premier League table - 10 points behind Newcastle and the Red Devils. However, they do have a game in hand and will need to gain some momentum sooner rather than later.
Jurgen Klopp will be keen to secure Champions League football next season and that could force him to enter the transfer market. Their priority is a new central midfielder, as well documented. Here are the latest transfer rumours from Merseyside.
Former Borussia Dortmund striker Michael Rummenigge believes his old employers will face a "huge" financial problem if they fail to qualify for next season's Champions League.
That could benefit Liverpool, as Klopp is trying to lure Jude Bellingham from Dortmund. The England international, 19, is expected to complete a summer move, with Real Madrid, Manchester United, Manchester City and Paris Saint-Germain also chasing his signature.
Chelsea complete record-breaking Enzo Fernandez transfer after deadline day rushWho do you think Liverpool should sign in January? Let us know in the comments below!
Klopp has made no secret of Liverpool's relatively-limited budget and Dortmund could be forced to sell Bellingham on the cheap if they fail to finish in the top four of the Bundesliga. Dortmund are sixth in the table - two points behind Freiburg in fourth.
"They have to finish fourth, if you don't finish fourth in the Bundesliga they have a huge problem financially and you have a huge image problem," Rummenigge told Wettbasis. "Dortmund has the second best squad in the league, with [RB] Leipzig [after Bayern Munich]."
Liverpool were reportedly interested in Benfica star Enzo Fernandez after his impressive performances for Argentina at the recent World Cup in Qatar.
Those rumours have gone quiet and Chelsea, who have pushed for the 21-year-old's signature throughout January, are going to make another bid to land him. That is according to Portuguese outlet Record, which claims the Blues will submit a €100million (£88m) bid shortly.
Benfica are expected to reject that and hold out for his €120m (£105m) release clause to be triggered, but a big offer from Chelsea may tempt them. Liverpool will have their fingers crossed that the Blues do not land Fernandez in the hope they can sign him in the summer.
Liverpool's chances of signing Moises Caicedo in January look slim after the Ecuadorian midfielder quashed transfer rumours.
The Reds are believed to be interested in signing Caicedo, who is enjoying a breakthrough season with Brighton. He has featured 18 times in the Premier League and was part of his country's squad for the recent World Cup in Qatar, scoring in a 2-1 defeat to Senegal.
Brighton are determined to keep hold of Caicedo, 21, and have reportedly rejected an offer of £55m from Chelsea. While that is good news for Liverpool, it seems unlikely Roberto De Zerbi's side will accept a bid before the window slams shut on January 31.
"I am focused on Brighton," Caicedo told Brighton's website. "I am here, I’m playing every day. Things from outside don’t trouble me, nor does it take that focus away because I’m focussed only on here. I handle [the transfer speculation] well. You hear rumours here and there, but I only try to be focused on the club where I am now - the club which opened the doors for me to be playing every week."
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