Defeat to their city rival leaves Los Blancos nine points behind league leader Barcelona, and their coach feels the prize is now a bridge too far.
Real Madrid cannot win La Liga after Saturday's 1-0 defeat to rival Atletico Madrid, according to coach Zinedine Zidane.
Antoine Griezmann's second-half goal secured a narrow 1-0 victory against the hosts to wrap up their third consecutive victory against their rivals at the Santiago Bernabeu.
Defeat leaves Zidane's side nine points behind league leader Barcelona, which could go 12 points clear at the top with a win over Sevilla on Sunday.