Unai Emery insists Arsenal can still finish in the Premier League's top four despite a shock 3-2 home defeat to Crystal Palace on Sunday.
Emery's side paid the price for a defensive horror show at the Emirates Stadium that leaves their hopes of qualifying for the Champions League via the domestic route hanging in the balance.
The Gunners, who can also reach Europe's top club competition by winning the Europa League, fell behind to Christian Benteke's first goal for a year before Mesut Ozil equalised early in the second half.
Shkodran Mustafi's blunder allowed Wilfried Zaha to put Palace back in front.
James McArthur took advantage of more woeful Arsenal defending to make it three. Pierre-Emerick Aubameyang reduced the deficit, but it was too late to stop Palace's first league win at Arsenal since October 1994.
"It's a big frustration because it was a big opportunity. At the set pieces, we didn't work and weren't as strong as we have been," Emery said.
"Their second goal was very bad for us and took away our confidence."
Arsenal sit fourth, level on points with Chelsea who play Burnley on Monday.
Arsenal's first league loss at the Emirates since the opening weekend of the season means they need to improve a dismal away record when they play at Wolves and Leicester this week.
Emery remains convinced they can finish into the top four.
"We still have the possibility to achieve our first target -- qualifying for the Champions League -- through the Premier League or Europa league," he said.
"In this key moment, we have the chance to fight for the top four. If we win at Wolverhampton, it is still in our hands."
Emery's team were authors of their own downfall when Palace took the lead in the 17th minute.
Benteke won a free-kick wide on the right. When it was curled in, Mustafi and Konstantinos Mavropanos both stood watching as Benteke thundered past to head home from close-range.
Mustafi was guilty of appealing for offside rather than following Benteke and the centre-back made another costly miscue moments later when he headed over from close-range.
It was that kind of afternoon for Arsenal, who felt Palace's Aaron Wan-Bissaka should have conceded a penalty when he blocked a cross with his hands.
Zaha, who says he wants to leave to play in the Champions League next season, gave a glimpse of his class when he accelerated away and delivered a cross that Benteke ballooned over the bar.
"He's given an honest answer to a question, but that didn't look like the performance of a player keen to get away," Palace boss Roy Hodgson said of Zaha's influential display.
"We have no interest in selling Zaha. But you never know what can happen. Life throws up these things."
Arsenal drew level two minutes after the restart.
Alex Iwobi slipped a pass to Alexandre Lacazette on the edge of the area and the Arsenal forward picked out Ozil, who beat goalkeeper Vicente Guaita with a fine strike at his near post.
Mustafi's day to forget hit a new low in the 61st minute as Palace went back in front after another mistake from the German.
When Benteke flicked a header towards the Arsenal area, Mustafi seemed unware Zaha was behind him.
Holding out his arms to indicate the ball would run to keeper Bernd Leno, Mustafi allowed Zaha to run past and clip a cool finish into the far corner.
Shell-shocked Arsenal crumbled again as Palace made it three in the 69th minute.
Having already won at Manchester City in December, Hodgson's side were on course for another famous scalp when Scott Dann nodded goal wards and McArthur headed past Leno.
Aubameyang capped an incisive burst with his 24th goal of the season in the 77th minute, but it was too little to spare Arsenal's blushes.