Brendan Rodgers's side have lost their past two games with a defeat coming at home to Southampton in the Premier League last week, before they were knocked out
of the League Cup by Manchester United on Wednesday.
However, the Reds travel to the Stadium of Light today to face a rock-bottom Sunderland who are still adjusting to life after Paolo Di Canio's sacking, and Smith is convinced that his former club can make the most of their opponents' plight.
"I think it's a good time to play Sunderland because although Paolo Di Canio has gone, he's not been replaced, we can exploit that," Smith told the Liverpool Echo.
"So if we get back to winning ways and then at home against Crystal Palace and West Bromwich Albion next month, we'll still be right up there.
"It might not feel like it after the last seven days of hurt but there is still everything to play for this season – and believe in."
Liverpool are currently sixth in the Premier League.