On December 17, Liverpool Offside wrote a blog post entitled "Liverpool are a Mid-Table Side Heading for a Mid-Table Finish". Anyone would have been hard-pressed to disagree with them. Up until that point in the season, nagging injuries to Lucas Leiva, Fabio Borini's prolonged absence and Brendan Rodgers' failure to strengthen his attack in the summer transfer window had Liverpool looking like the most mediocre of mid-table sides.
Raheem Sterling, a very raw 17-year-old, had become a key player. Brendan Rodgers was experimenting with Stewart Downing playing at left back, behind Jose Enrique, who was moved into the midfield. Joe Allen's form was starting to drop. It was obvious that, without an in-form Allen and a fit Lucas, Steven Gerrard was not able to be the most effective version of himself. While Gerrard is still an excellent player, he's more dependent on his midfield mates at his advanced age than he was in the Rafa Benitez era.
Liverpool still haven't addressed all of their depth concerns, but the combination of their winter signings and the improving health of their squad has them turning a corner. Suddenly, the once bottom-half Reds are up to seventh place. They're just three points behind Arsenal and seven behind Tottenham Hotspur, well within striking distance of fourth place.
It will take a while for him to find his form, but Borini has returned and will, at the very worst, make a great substitute for Brendan Rodgers' side for the rest of the season. Jordan Henderson finally looks the part of someone who was once worth eight figures to Liverpool, while Lucas is expected to start in midfield against Arsenal. Goalkeeper Pepe Reina and left back Jose Enrique, who didn't play in the FA Cup loss to Oldham, are back fit as well and should also return to the starting XI.
They return at a time when new signing Daniel Sturridge is looking dangerous and Luis Suarez is in the best form of his life. Philippe Coutinho is expected to sign for Liverpool from Inter Milan before the deadline, and he should make an instant impact for the club when he first takes the pitch.
Finally, Rodgers has a squad of players at his disposal that makes sense. They're perfect for the passing, possession-oriented system that he wants to run, with attributes that make them able to play quickly and on the counter as well. Sturridge, Suarez and Coutinho are better versions of Nathan Dyer, Scott Sinclair and Danny Graham, the attacking trio that shaped Swansea's unique style of play, which was just as much continental as it was English.
And not only do these players fit his system, but they compliment each other perfectly. Suarez has been forced to make do with Downing, who doesn't fit the current Liverpool system at all, and Sterling, an über-talented, but raw and not yet developed player flanking him. He will now have a pair of players who fit in with the team perfectly, but compliment him in different ways on either side. Coutinho is a tricky and creative winger who is happy to pass, while Sturridge is a physical beast of a player and a top-drawer finisher. He might be a bit too selfish for his own good (or the good of his team), but he's combined well with Suarez in early appearances, and their chemistry should only improve with time. All three of Suarez, Sturridge and Coutinho bring different skills to the table which should compliment each other perfectly.
Behind them, a midfield of Gerrard, Allen and Lucas is about as balanced as it gets. If Gerrard is unavailable for whatever reason and Allen isn't in form, a midfield of Lucas, Henderson and Jonjo Shelvey isn't too shabby either. Liverpool have still yet to find an adequate backup for Lucas, and their team fails to control games without him in the center, but their midfield matches up favorably with anyone in the country when he's healthy.
They have similar problems along the back line, where Jamie Carragher is well past his peak and neither Jack Robinson or Andre Wisdom has approached their peak yet, but the first choice back line of Enrique, Glen Johnson, Martin Skrtel and Daniel Agger is undoubtedly top-four quality, and they have the technical skill to fit in with what Rodgers wants to do.
Liverpool aren't anywhere near back to their glory days, and they still have very serious depth problems in defense and at defensive midfield. But as long as Lucas and their defenders stay healthy, there's no reason to believe Liverpool can't make a top four charge. Sturridge and Coutinho, along with the fitness of their defensive players, should keep Liverpool firmly in the top seven.
If Coutinho arrives and performs at his best, he could help them reach the tipping point that takes them from a Europa League side to being a top four contender.