The BVB general manager feels the first-half performance in the defeat to Schalke was unacceptable, though their win against Shakhtar Donetsk gives them something to hang on to
Jurgen Klopp's side were disappointing in their 2-1 Ruhr derby defeat to Schalke, with their first-half display being especially poor, and Watzke feels a repeat performance in Europe would see them eliminated.
"If we play the way we did in Gelsenkirchen in the first half, there is no way we will go further in the Champions League," he told Bild.
The 53-year-old was not totally negative though, and feels if they can find the performance levels from the 3-0 win over Shakhtar Donetsk, then they will find success.
He added: "If we play like we did against Donetsk, we will win more league matches and find our form again."
BVB reached the quarter-finals of Europe's premier club competition by seeing off Shakhtar in the last 16, though it is very unlikely they will catch Bayern Munich at the top of Bundesliga, who lead by 20 points.