Carlo Ancelotti admits Chelsea were well below their best against a determined Liverpool side on Sunday.
The Blues entered their weekend encounter with the Reds hoping to close the 10-point gap which separates them from league leaders Manchester United.
They were unable to do so, though, with a 1-0 defeat suffered at Stamford Bridge.
Ancelotti handed record signing Fernando Torres his debut against his former employers, but the Spaniard was unable to make impact.
In the end the Blues were forced to accept defeat, even if they felt they were denied a couple of decent penalty shouts late on.
"I think the challenge on [Branislav] Ivanovic was a penalty, but we have to accept that we didn´t play well," Ancelotti told Sky Sports.
"We have to judge the performance of the referee and our performance. We didn´t play well enough to win this game. They defended very well and we weren´t able to find the space to attack."
System
Torres was withdrawn after 65 minutes, with Salomon Kalou thrown on in his place, and Ancelotti insists the decision to replace the £50million striker was driven by tactical motives.
He said: "I wanted to change the system. It was the first game for him [Torres] and for the first 65 minutes he did his best.
"It wasn´t easy because it was difficult to find space. We played from the back too slowly so there was no possibility for our strikers to play with speed.
"It was the same system that did very well against Sunderland. The problem was that Liverpool defended very well. They changed tactics, they played with three defenders, and we weren´t able to find space."
The only goal of the game arrived on 69 minutes, with Raul Meireles making the most of a defensive mix-up between Petr Cech and Ivanovic to fire home.
Ancelotti added: "It was a mistake from both. There wasn´t a good reaction to the cross.
"I think the right result was a draw but we have to understand that to win we have to play better."
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