The Toffees' hopes of European football took a huge dent as they suffered a 1-0 loss to relegated Sheffield United on Sunday (16.05.21) and Ancelotti is infuriated by his side's disappointing record at Goodison Park this season.
The Everton boss said: "With this defeat, we've lost the opportunity to fight with more possibility of being in Europe next season.
"We lost a great opportunity; our chances are less now than before. We have two games left to play; we need to see which position we are in at the end.
"It's really difficult to explain what is going on here at home; we've lost a lot of games, all the same kind of games.
"I have to take responsibility for this, I hope the players also take the responsibility. I am really embarrassed."
Ancelotti feels that a number of his players lack skill on the ball and believes the club will need reinforcements in the transfer market if they are to get closer to Champions League qualification.
The Italian coach said: "We don't have players with strong personality with the ball.
We are a team with different characteristics and are more direct.
"One of the technical reasons for this poor run is that, when we try to build up from the back, we have difficulty and are a bit slow because we don't have the confidence with the ball compared to the confidence we have without it.
"We try to play more attacking football, but it didn't work as well as the direct attack and counterattack in the away games.
"This has never happened. Usually when you have difficulties in periods at home or away but then you react. This season has been really bad at home and a great reaction away.
"We need to look at this for next season and maybe try to have a better squad."