Kulwant Singh, 32, of Salford, and his sister Ravel-Kaur Singh, 37, of Cheetham Hill, Manchester, died and Ms Singh's two sons were injured.
Their Nissan Micra was involved in a crash with a Mercedes on Bury New Road.
Courtney Meppen-Walter, 18, and another driver were arrested on suspicion of causing death by dangerous driving.
Meppen-Walter, who was driving the Mercedes, and a 19-year-old man who was driving a Volkswagon Golf, have now been released on police bail.
Greater Manchester Police confirmed the inquiry into whether they were racing is one of several lines of investigation.
The Singh family had been at the Gurdwara Sri Guru HarKrishan Sahib temple on Sherborne Street.
Speaking outside the temple, Joginder Singh said: "He was a nice guy and when I heard about this accident I felt very sad. He was a wonderful guy."
Ms Singh's sons were passengers in the back of the Micra.
The 16-year-old boy has a head injury which is not believed to be life-threatening.
The 17-year-old boy also sustained a serious head injury and he remains in a critical condition. Both remain in Salford Royal Hospital.
Meppen-Walter joined City in July 2010 and has yet to play for the Premier League champions.
The youth team player has been a regular in the England under-17 side.
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