Manchester United manager Ole Gunnar Solskjaer said his side hit a season low point in the Carabao Cup semi-final first-leg loss to Manchester City.
The hosts were 3-0 down at the break, going on to lose 3-1, with Solskjaer saying his players' heads dropped after Bernardo Silva's 17th-minute opener.
"From 15 minutes to half-time was the worst we have played this season," said the United boss after Tuesday's game.
"We couldn't cope with the setback. Now we have a steep mountain to climb."
Riyad Mahrez's 33rd-minute second was followed by an Andreas Pereira own goal, and at half-time it seemed possible a completely outclassed United faced a repeat of their embarrassing 6-1 home defeat by City in 2011.
Instead, the introduction of Nemanja Matic for Jesse Lingard brought some stability to their midfield, and Marcus Rashford's fourth goal in Manchester derbies added at least some jeopardy over who will go on to meet Leicester City or Aston Villa in the final on 29 February.
United famously overturned a two-goal deficit last season to reach the Champions League quarter-finals, following up a 2-0 first-leg loss to Paris St-Germain by winning 3-1 in France and progressing on away goals.
"It's not three points and it's not done," said Manchester City boss Guardiola.
"They are a dangerous team. Last season they lost by the same number of goals at home to PSG, went to France and qualified."
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'It is not a quick fix'
The defeat was United's third in their past six games, following Premier League losses at Watford and Arsenal.
Before they go to City for the second leg on 29 January, Solskjaer's side play Wolves in their FA Cup third-round replay on 15 January and, four days later, visit runaway league leaders Liverpool.
"I have said before, it is not a quick fix," said the Norwegian. "It is something we have started, and you can see we are still a way off - but it is something that needed doing."
In contrast, City have now won eight games out of nine, the only break in the sequence coming at Wolves on 27 December, when they played 80 minutes with 10 men after goalkeeper Ederson was sent off.
However, rather than feeling his side are in their best form of the season, Guardiola said he detected fatigue after five games in 12 days.
"The way we have been playing is good, not far from last season - but the team I see is a little bit tired," said the Spaniard.
"The schedule has been a lot for these guys. It's crazy, honestly."