Real's expensively-assembled side needed a controversial stoppage-time penalty to win 2-1 at promoted Elche on Wednesday before they crashed to their first league defeat to city rivals Atletico this century in Saturday's Madrid derby at their own Bernabeu stadium.
The players, several of whom including world record signing Gareth Bale and playmaker Isco joined in the close season, have yet to gel under Ancelotti, who took over from Jose Mourinho at the end of last term.
The Italian has tried to impose a system based more on possession rather than the counter attacking style favoured by Portuguese Mourinho and Ancelotti said Real were suffering in defence as a result.
"Things are still not coming naturally to the players, which is normal when you make changes," he told a news conference.
"We need a bit more time so that the players can play the system in a more natural way. We are more vulnerable at the back and I think we have to find a balance between possession and a more balanced defence."
He added that Real's winning back of the ball wasn't good.
"And that's why we then always have to start from the back, faced with a compact team where it is hard to find efficient ways to attack."
Real began their Champions League campaign with a bang when they thrashed Galatasaray 6-1 in Istanbul this month but their domestic woes over have prompted the first serious stirrings of discontent.
The club's fans made their feelings clear during the Atletico match and will do so again if things are not going well on Wednesday, but Ancelotti said their attitude was a source of motivation for him and the team.
"We need to react soon, in terms of results and our play," he said. "I have a lot of confidence in the players and I am sure we will react well. That's why the match tomorrow is important. The match tomorrow has another meaning.
"It's not just about continuing our positive progress in the Champions League but also about changing the attitude and spirit that we have now."
Sergio Ramos, one of the club captains and a heavyweight in the dressing room, echoed Ancelotti's message.
"Right now it's about recovering our image, feeling good about ourselves again, and the best way to do that is performing on the pitch," he told reporters.
"Those of us who have been here longest know how demanding our fans are. But we understand it, we all like to win and the fans do too and are used to seeing their team play well. It's a positive thing that they push you."
Like Ancelotti, Ramos was repeatedly quizzed about why Real have not been performing and he suggested it was up to each player to step up.
"It's difficult to put your finger on one particular thing," he said. "Whether we can individually make more of an effort, well that is something we are working on.
"Little by little we are getting our confidence back and that's how you can change things around. The coach has full confidence in his players just as we have full confidence in him. When you have that the rest will fall into place."
Copenhagen, who are playing nine-times European champions Real for the first time, held visiting Italian side Juventus to a 1-1 draw in their Group B opener.
- Sports & Recreation