The Whites are just two points clear of Everton in 18th, having played a game more, and sit level on points with Burnley who are above Marsch's side on goal difference.
Leeds' loss to City was their first defeat in six games but with four fixtures remaining, they are still very much in the relegation mix.
Leeds were much-improved after their goalless draw at Crystal Palace but were undone by set-pieces for both opening goals.
“If you take out those two goals, the first 70 were pretty good,” said Marsch.
"A team like City can hurt you in so many ways, but we had a lot of control. I challenged the guys and I’m proud of them. The best part is we saw the fans’ response.
“A 4-0 loss at home and you saw so much passion and love for this team and this club. Some people may have felt I was being facetious about the best club (Leeds) versus best team (City), but I meant that."
With both Burnley and Everton picking up wins, against Watford and Chelsea respectively, Leeds are still left with plenty of work to do to survivie.
Following the latest round of results, data experts at FiveThirtyEight have predicted how the final table will look...
Leeds were much-improved after their goalless draw at Crystal Palace but were undone by set-pieces for both opening goals.
