Real Madrid suffered a shock defeat to relegation-threatened Valencia seriously denting their hopes of retaining the La Liga title.
Vinicius Junior missed a penalty in the 13th minute before Mouctar Diakhaby opened the scoring for the visitors just two minutes later.
The Brazilian made up for his earlier mistake with a goal just after half-time but Hugo Duro’s 95th minute strike earned Valencia’s first win at the Santiago Bernabeu in 17-years.
Speaking to the press after the game, Ancelotti addressed the elephant in the room.
He said: "It's much more difficult to fight for the league, but we have only one idea, to do well until the end. We still have a chance. It's less after this game, but we have to fight until the end."
Barcelona will go six points clear at the top of La Liga should they beat Real Betis.