Answer:
In the novel "The Outsiders" by S.E. Hinton, Ponyboy Curtis is the protagonist who narrates the story. The quote you provided is from Chapter 1, where Ponyboy reflects on his tendency to lie to himself but acknowledges that he never truly believes his own lies.
The specific situation Ponyboy is referring to when he says, "I was still lying and I knew it," occurs after he has been jumped by a group of Socs, a rival gang. Ponyboy tells himself that he's not scared of the Socs, despite feeling deeply frightened during the altercation. He lies to himself as a way of coping with the fear and the traumatic experience he just endured. However, he is aware of his own deception, hence the acknowledgment that he lies to himself all the time but never truly believes his own falsehoods.
In essence, Ponyboy is lying to himself about his emotional state and his reactions to the dangerous situations he finds himself in as a member of the Greasers gang. This internal conflict reflects Ponyboy's struggle to reconcile his tough exterior with his vulnerability and fear, which are natural human emotions that he feels compelled to suppress in his environment.
Hope this helps..
Have a nice day!!