On a night when Manchester City emerged unscathed from a grilling at Arsenal to draw 0-0 and stay second in the title race behind Manchester United, Jose Bosingwa's early own goal condemned Chelsea to a fifth defeat in 11 league matches.
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In that period last season's double winners have collected just 10 points and have slumped from top to fifth, nine points off the pace.
"I'm still confident but obviously I have to do better because this is not enough what we are doing at this moment," a downbeat Ancelotti told Sky Sports.
"This has been a long time, too long for our club and our team. Nothing is lost though and we have to compete in every competition. But it's very difficult to come back and fight for the title now."
Liverpool boss Roy Hodgson accused his side of a "shooting ourselves in the foot moment" as they went down 3-1 at Blackburn Rovers to quickly wipe out the tonic of a last-gasp win over Bolton Wanderers a few days earlier.
Avram Grant's West Ham United returned to the foot of the table after a 5-0 hammering at Newcastle United while Gerard Houllier's prospects also look bleak as his Aston Villa side fell into the bottom three after a 1-0 home defeat by sixth-placed Sunderland.
On Tuesday Ancelotti bemoaned his side's blunders late in matches but against Wolves, who began the night bottom but ended it out of the relegation zone, they needed just six minutes to hand their opponents a welcome gift.
Stephen Hunt's corner should have been cleared but instead the ball sliced off the shin of Boswinga and ended up in the net with keeper Petr Cech helpless.
Arsenal, attempting to reassert themselves as United's main title rivals, dominated Roberto Mancini's Man City but after so
