Sherwood said that Liverpool have worked their way into the title race and because of this the expectation will be on them to win on Sunday in order to stay with the teams around them.
"They're very, very close - one point off the lead and absolutely flying," he said in his pre-match press conference. "They've got a strike partnership in Luis Suarez and Daniel Sturridge that's the best the Premier League has seen for a very long time, and they've given themselves a real chance.
"Now they have to believe they've got something that might fall through their grasp and slip away and - believe me - that's a real bad feeling to have because perhaps you don't play with freedom you'd played with earlier in the season. I know what it's like myself.
"It all depends on how they can hold their nerve. City and Chelsea have to be favourites because of the players they have who've crossed that line and done it previously."
Spurs are sixth in the Premier League, while the Reds are second.