The Reds are down in seventh place in the Premier League and 13 points adrift of leaders Chelsea, while they also face being eliminated from the Champions League at the group stage.
- Champions League fixtures
- Liverpool home
However, ahead of a clash with Hungarian side Debrecen, Carragher said: "Going out of the Champions League would not be the disaster people think.
"Obviously we will do everything we can to stay in it by making sure at least we win our match. But if we do go out, there is always the Europa League.
"If we could go on and win that, it would put a different gloss on our season.
"We have got ourselves into a bit of a hole and hopefully we can get out of it. It has been done before and we know we can do it again.
"What happens here is not just about the Champions League. A win here will get the confidence going again and us playing well again.
"We have a big game at Everton on Sunday, so we want need to get a good result to give us confidence, not just for the Champions League, but for other big games too.
"We need a good result, a good performance. There is a lot more at stake than a Champions League win. We just have to do our job and hope the other game goes for us."