City are fourth in the table, only seven points behind leaders Bidvest Wits with a game in hand, but McCarthy is tempering expectations for this season.
"It's hard to deal with a league race, we don't have enough squad to be thinking about it, for us it's to think about the future of this club," he said after the last league defeat to AmaZulu.
"As much as we're not worried about the league, when we see opportunities of capitalising, the players tend to struggle psychologically because some are not used to being in that position.
"Players might be thinking too much about the league, which kills our momentum at times."
McCarthy was asked if he believes his team can finish in the top three, and again he gave his opinion that squad depth might not be enough to achieve that.
"We can finish in the top three, but we need to be realistic, we don't have a big squad like other teams. Some have 40 players and we only have 23, we don't have that privilege."
The Citizens are on a good run in the NedbankCup and reached the quarter-finals on Friday night after a 3-0 win over Highlands Park at Cape Town Stadium.