The Premier League title race is heating up, with the Reds currently level on points with leaders Manchester City but holding onto a game in hand.
That game will come on Sunday in the form of a daunting trip to Old Trafford, where red-hot United await.
The Red Devils have yet to lose a Premier League match under Ole Gunnar Solskjaer and have moved up to fourth in the table.
With a daunting week ahead, Carragher knows it's time for Liverpool to show what they're made of.
"A point [against Man Utd] would put Liverpool back top of the table, that's the position you want to be in ideally at the end of the week, which is a really tough week for Liverpool – two biggest rivals away from home, if they're top of the table on Monday after the Everton game, I'm sure they'd be pleased," Carragher said on Sky Sports.
However, the 41-year-old is hoping that his former side can do even better than a draw at Old Trafford and serve a timely reminder to Man City and Tottenham, who are five points back of Liverpool and City, that they are the favourites for the title.
"I think in the first half of the season Liverpool made five or six statements that made people stand up and notice – this is the real deal, this is a team that are going to challenge and could possibly win the Premier League," Carragher continued.
"But we're almost in March and Liverpool haven't made one of those statements yet in the new year.
"And between now and the end of the season they're probably going to have to make four or five of them, and there's probably no better place in Liverpool supporters', players' eyes than doing that at Old Trafford.
"So if you could go and win it would be a massive three points for the table obviously but also for Man City who are just about to kick off in the Carabao Cup final because that is a game they'll be looking at and thinking: 'Liverpool will drop more points.'"
Man City face Chelsea in the Carabao Cup final on Sunday, which is scheduled to kick off 20 minutes after Liverpool's match at Manchester United finishes.