The English double winners face a tricky test against FC Copenhagen in the first leg of their Champions League last-16 clash in the Parken Stadium on Tuesday, when a poor result would fuel speculation about Ancelotti's future.
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Fifth in the Premier League and dumped out of the FA Cup on penalties last weekend, Chelsea's season now hangs on progress in a competition they have threatened to win since Roman Abramovich bought the club in 2003.
"It could be the best season we ever have in memory," Ancelotti told a news conference.
"Maybe it could be the worst. I don't know, but wait, Chelsea has not died, it is still alive."
Chelsea came agonisingly close to winning it in 2008 when, but for John Terry's missed penalty in Moscow, they would have beaten Manchester United.
"This is football. It is difficult to stay at the top, sometimes you have to manage bad moments," he said.
"A lot of times I was able to manage these moments. So wait, it is not finished."
"It will not be easy. Copenhagen are a very good team with good concentration. We have to play for 90 minutes and prepare for both games," Ancelotti said.
"Copenhagen played very well in the group stages. They showed very good organisation, played very good football and they have very good players.
"It will be a game with balance. They have strength, power and timing and we are here to play our football and try to do everything to win.
"They have a fantastic tempo, so we want to have the same, we want to work hard, play our football and show our quality. If you have courage, you can win."
"Fernando could definitely be the key," Terry said. "Being in the position we ar
