The Blues went down to a 2-0 home defeat but Sven felt it was a vast improvement on City's sorry showing at relegation-threatened Birmingham last week, when we slumped to a dismal 3-1 defeat at St Andrews.
Although Richard Dunne gave Chelsea the lead with a sixth-minute own goal, City responded well and dominated the rest of the half before Salomon Kalou put Chelsea 2-0 up in the 53rd minute.
"I think we performed rather well," said Sven. "We played football and created chances, especially in the first half.
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"You're never happy when you lose a football game, but I was really disappointed and unhappy a week ago when we lost without giving ourselves a chance to win the match.
"Today I think it was different because we tried all 90 minutes but after it's 2-0, it's very much uphill.
"It's not good to lose but if you have to lose, lose like we did today."
City's European hopes are all-but-over having now won just twice in their last 12 league games, but Sven hopes the Blues can build on Saturday's showing heading into the season run-in.
"If you can play football like that against a top team in the Premier League, even the world, then you know you can do things," he said.
"There are still five games to go and the important thing now is not to give up, and try to take as many points as possible. Then we will see what's happening and see where we are in the table.
"As long as it (European qualification) is possible, we have to believe it and we have to fight for it. I hope we have the same spirit and character next week as we did today."