Carlo Ancelotti has conceded Real Madrid will not secure a top-eight finish in the Champions League and is prepared for Los Blancos to have to navigate a play-off tie.

Under the Champions League's new format, only the top eight teams in the 36-team table advance automatically to the last 16, with the next 16 best finishers taking part in play-offs to join them in the new year.

Madrid are going well in LaLiga, sitting two points adrift of leaders Barcelona with a game in hand, but they have lost three of their five matches in the Champions League.

They sit 24th in the table ahead of Tuesday's trip to fifth-placed Atalanta. Should they lose in Bergamo, it would be the first time a reigning European Cup/Champions League holder has ever experienced a three-game losing streak in the subsequent campaign.

The Opta supercomputer currently gives Madrid a 5% chance of retaining their Champions League crown, and they only reach the last 16 in 64% of tournament simulations. They are given a 92% chance of featuring in the knockout-phase play-offs.

Ancelotti knows Madrid need a win to assuage any fears of an early exit, and he believes a play-off spot is the limit of Los Blancos' ambitions.

"That is nothing more at stake than three important points that will help us to qualify," the Italian told a press conference on Monday.

"Unfortunately we will have to play an extra round, but that's it, I have a lot of confidence in my team.

"Things have improved, we are now in a good dynamic and will keep improving as we move forward.

"Tomorrow's game could be the most difficult one between now and the end of the year. 

"We are worried about finding a good strategy to beat a very tough opponent like Atalanta, but nothing more."

Ancelotti expects to face a much-improved Atalanta side from the one they beat 2-0 in the UEFA Super Cup in August. 

The Europa League champions top Serie A and are on a nine-game winning streak in all competitions, including victories over AC Milan, Napoli and Roma.

"Atalanta are doing very well, they have improved a lot compared to the Super Cup. They're on a roll and they're full of enthusiasm but that give us a chance to go out there and prove a point while earning three important points," Ancelotti said.

"They are a great team, a club that does a spectacular job despite losing a lot of players every summer. They always find ways to adapt and that says a lot about who they are."