Liverpool boss Jurgen Klopp said his side allowed Manchester City to "do what they wanted" as the Reds were thrashed 4-1 at the Etihad on Saturday.
City did not miss the injured Erling Haaland as goals from Julian Alvarez, Kevin De Bruyne, Ilkay Gundogan and Jack Grealish secured an eventually comfortable victory for the defending champions.
City and Liverpool have finished as the top two in four of the past five Premier League seasons, but Liverpool's humiliation in the closing stages summed up a dreadful season for Klopp's men.
A chastening defeat leaves them still seven points adrift of the top four.
"We were not there anymore. We were completely open, too passive, too deep," said Klopp of his side's second half performance.
"Against City 14 or 15 players need to be on top of their game. After being 3-1 down it's difficult but, apart from that, City could do what they wanted because the spaces were too big. We were lucky they only scored one more."
A groin injury meant Haaland was watching on from the stands alongside his father and former City midfielder Alfie Haaland.
But City shrugged off the absence of their 42-goal striker as Alvarez stepped up with a rare chance to start and Grealish produced arguably his best performance since joining the club for a Premier League record £100 million in 2021.
"From the first minute until the 93rd minute, it was almost the perfect performance," said Guardiola.
"Always we have fought against Liverpool. The way they defend, the way they play is so difficult for us, but today the players were magnificent."
City were forced to come from behind after Diogo Jota broke the offside trap before teeing up Mohamed Salah to slot home his 23rd goal of the season.
The lead lasted just 10 minutes as the home side showed their quality even shorn of Haaland.
De Bruyne, Riyad Mahrez and Grealish combined to open up the Liverpool defence and Alvarez was left with the simple task of slotting in his 13th goal of the season despite spending most of the campaign as Haaland's deputy.
- Grealish 'buzzing' -
It took just 53 seconds of the second half for City to edge in front thanks to another scintillating team move.
Alvarez was the creator this time as his cross-field pass freed Mahrez to race into acres of space behind the Liverpool defence.
The Algerian's cross was perfectly weighted to cut out Alisson Becker for De Bruyne to tap into an unguarded net.
If City's first two goals were the fruit of collective brilliance, Liverpool's defending for the third summed up a miserable season for Klopp's men.
Alvarez was afforded an incredible amount of time inside the box by Fabinho to pick out a shot and, when his effort was blocked by Trent Alexander-Arnold, Gundogan also had the space to take a touch before firing into the top corner.
Liverpool have now conceded three or more goals in nine games this season and the punishment did not end there for the visitors.
Grealish was the standout individual on the day and rounded it off with his first goal at the Etihad this season.
City's movement off the ball was again too good for a cumbersome Liverpool defence as Grealish and De Bruyne exchanged a one-two before the England international slotted into the far corner.
"I feel back to my normal self, feel fit and back to confidence," said Grealish. "Scoring and getting the assist, I'm buzzing."