The Eagles could have gone second in the Championship with victory on the south coast but two goals from Leonardo Ulloa and David Lopez's free-kick condemned them to a 3-0 defeat.
Palace now have a two-week international break to lick their wounds before they host Birmingham a week on Friday.
And Holloway said: "There's eight games left, we've got to dust ourselves down and look optimistically at the next challenge.
"We've got eight games left to do a bit better than that. Brighton have enjoyed that but we have to get back to work. We'll live to fight another day."