Despite the disappointment in Jeddah, Ancelotti remains optimistic as Real Madrid are just a point behind La Liga leaders Atletico Madrid, and are still in contention for multiple trophies, including the Champions League and Copa del Rey.
"It was a step back but we have to look ahead because we are still in a good position in every competition," he said. "It hurt us a lot but it didn't sink us. Obviously it was a bad game, we made a ton of mistakes. We analysed it, evaluated it and found solutions. A month ago we won the [FIFA] Club World Cup and six months ago we won the Champions League.
"We are competing. We lost one game, it was a final, it hurt but we've won many finals. It was a heavy loss but it was just one game. We are doing well in every competition and we are going to continue fighting."