Despite finishing top of the newly formatted group stage with an impressive 21 points, Arne Slot's side faced a difficult last-16 draw against a formidable PSG, who remain unbeaten in Ligue 1 and, in Slot's words, are "statistically the best team in Europe."
Liverpool held a 1-0 aggregate lead after the first leg, but PSG's Ousmane Dembele levelled the tie in the return fixture.
The two sides could not be separated across 210 gruelling minutes, forcing the contest into penalties, where PSG triumphed 4-1 to seal their place in the quarter-finals.
Slot expressed pride in his team's performance but hinted that he may approach the league phase of next season's Champions League differently.
"I am feeling disappointed about being knocked out. I do feel in the end of the season, it does matter how we presented ourselves in Europe," Slot told the media after the game.
"I just said, we were not in the Champions League last season and this season we really showed ourselves. We can be proud of what we did. We won seven games in a row and then we played with our substitutes and lost against PSV.
"I think we played last week not our best game but today we saw a completely different Liverpool. We go out in a way that I think has impressed Europe.
"It is something now to take into consideration about how much worth it is to end up first in the league table if you can face Paris Saint-Germain in the next round.
"It is what it is. Maybe I am [speaking] too soon now but maybe it would be more fair that after the round in between, the one that wins the league table plays against the team that is lowest position after the teams have played.
"But that is also because we were so unlucky to play Paris Saint-Germain because we could have also gone to the other side of the draw.
"In the end, if you want to win the tournament you have to beat teams like Paris Saint-Germain and that's what we didn't do today after an incredible first 90 minutes of football from us."
Arsenal head into their blockbuster clash against reigning champions Liverpool on Sunday without star winger Bukayo Saka, who has been ruled out with a hamstring injury, manager Mikel Arteta confirmed.
Liverpool have received a significant boost with young Northern Ireland star Conor Bradley back in contention for a starting spot in their Premier League showdown against Arsenal at Anfield on Sunday.
Bayern Munich headline the Bundesliga contingent in this season's Champions League, and their 2025/26 draw promises plenty of drama.
The five La Liga sides taking part in the 2025/2026 UEFA Champions League have learnt their fate after the draw for the continental showpiece took place on Thursday evening.
