Ismaila Sarr struck twice in the first half and Yeremy Pino grabbed the third to condemn Arne Slot’s side to a sixth defeat in their last seven games in all competitions.
Slot fielded a weakened team as he prioritised Liverpool’s crucial games against Aston Villa, Real Madrid and Manchester City over the next two weeks.
But it was still another embarrassing result for Liverpool, coming hot on the heels of a 3-2 loss at Brentford on Saturday that further dented their spluttering Premier League title defence.
The Reds have lost their last four league matches and trail leaders Arsenal by seven points.
“It’s not Liverpool standards to lose six out of seven,” Slot said. “But it’s only two days to rest, play the next one, then only two days’ rest, play Real Madrid and then a few days more for Man City.
“Everyone can have his opinion about it, but with the squad we are having maybe 15, 16 first team players available, this is the choice I’ve made.
“The pressure was already very high for the upcoming week where we again have to face three very difficult teams.”
Assailed by criticism of their defensive failings and the poor form of blockbuster summer signings Alexander Isak and Florian Wirtz, Liverpool’s fall from grace has been stunning.
Isak, Wirtz, Mohamed Salah and Virgil van Dijk were all absent as Slot made 10 changes and fielded teenagers Kieran Morrison, Rio Ngumoha and Trey Nyoni.
It was a gamble that never looked like working and FA Cup holders Palace have now defeated Liverpool three times in the space of just 80 days.
They beat the Reds on penalties in the Community Shield and 2-1 in the Premier League.
Slot switched to a back three in a bid to revitalise Liverpool, but the move backfired when Joe Gomez’s mistake allowed Sarr to rifle home from 12 yards in the 41st minute.
Senegal winger Sarr increased Palace’s lead on the stroke of half-time, netting from Pino’s pass in front of the shell-shocked Kop.
Liverpool substitute Amara Nallo was sent off in the 79th minute for a professional foul on Justin Devenny.
Pino slotted in Palace’s third in the 88th minute to book a last eight trip to Arsenal.
Man City survive scare
Holders Newcastle beat Tottenham 2-0 at St James’ Park to set up a quarter-final visit from Fulham.
Fabian Schar headed Newcastle’s opener from Sandro Tonali’s 24th-minute corner and Nick Woltemade nodded in the second goal from Jacob Ramsey’s cross on 50 minutes.
Nick Woltemade nodded in the second goal from Jacob Ramsey’s cross on 50 minutes.
Manchester City came from behind to win 3-1 at second-tier Swansea, securing a quarter-final at home to Brentford.
City, featuring 10 changes from the 1-0 defeat at Aston Villa last week, trailed to Goncalo Franco’s 12th-minute goal.
But Jeremy Doku’s deflected strike dragged City level in the 39th minute and Omar Marmoush scored in the 77th before Rayan Cherki’s stoppage-time effort completed the comeback.
Arsenal, who haven’t won the League Cup since 1993, beat Brighton 2-0 at the Emirates Stadium to make it eight successive wins in all competitions.
Ethan Nwaneri lashed into the bottom corner in the 57th minute and Bukayo Saka struck from close range with 14 minutes remaining.
Aged just 15 years and 302 days, Max Dowman became Arsenal’s youngest ever starter and boss Mikel Arteta said: “It’s definitely something special.
“He has shown incredible skill to run past players at that level aged 15.”
Chelsea will visit third-tier Cardiff in the last eight after the Blues’ understudies won 4-3 at struggling Wolves.
Andrey Santos, Tyrique George, Estevao Willian and Jamie Gittens scored for Chelsea, with Toluwalase Arokodare and David Wolfe, who struck twice, replying for Wolves.
Chelsea striker Liam Delap was dismissed in the 86th minute for two bookings, prompting boss Enzo Maresca to label him “stupid” and “embarrassing”.
Liverpool have already lost grip of their Premier League title defense, having fallen seven points behind leaders Arsenal; Reds have slipped to seventh after four straight loses – what exactly has gone so wrong?; watch Liverpool vs Crystal Palace in Carabao Cup action on Wednesday
Liverpool are spiralling. What was initially a blip has morphed into a full blown crisis.
Arne Slot’s side have now lost as many Premier League games this season as they did in the entirety of their title-winning campaign (four). So, what has caused such a dramatic drop-off?
Long-ball catastrophe
Slot has already admitted Liverpool cannot cope with a long-ball strategy, so you can guess what tactic Keith Andrews employed during Saturday’s 3-2 success. Brentford peppered their visitors with 64 direct passes. Virgil van Dijk and Ibrahima Konate spent more time running towards their own goal than doing much else.
Perhaps it was unwise for Slot to spell out Liverpool’s frailty so publicly. “I’ve looked at how many long balls we already had to defend – 178 in seven games and then United came and we had to defend 59,” he said in his press conference, blaming shortcomings on the “playing styles we face”.
It served as the perfect blueprint. Brentford played their highest percentage of long passes all season, scoring within five minutes from a long throw before Kevin Schade was assisted by a 40-yard Mikkel Damsgaard pass to go 2-0 up. Liverpool were split wide open and it was a long way back from there.
Liverpool have faced a league-high 571 long balls this season
Susceptible to fast breaks
Slot might be keen to deflect blame but there is an obvious lack of coherence and balance to his current Liverpool structure. Under Jurgen Klopp, the Reds were a pressing machine and retained much of that intensity last year, but performances this term have been much more passive.
The pressure to intercept therefore falls on the midfield trio, who are faltering in transition. Liverpool have conceded the league’s fourth highest xG value (1.62) to fast breaks this season. Opposition teams have exploited full-backs who take too much risk and are constantly caught out of position. Bournemouth used this exact play on opening weekend and yet no lessons have been learnt.
Physicality issues
Without injured Ryan Gravenberch, and sometimes still with him, Liverpool look lightweight. They only won eight of 19 first-half aerial duels at the Gtech.
Slot packed the midfield with technicians, hoping to dominate possession, which they did, but failed to account for occasions where they lost the ball out of shape. Neither Florian Wirtz nor Curtis Jones are the combative type, which left Dominik Szoboszlai to fend for himself.
The Hungarian won more duels (11) than any player on the pitch but was covering the work of three midfielders off the ball. He was over-exposed. “Too many duels were lost, too many second balls weren’t won,” Slot conceded. Wirtz has the second lowest success rate in duels (33 per cent) of any Liverpool player.
Integration problems
Liverpool spent big of some of the world’s best attacking talent this summer. The theory behind such an aggressive drive was sound in part.
Both Luis Diaz and Darwin Nunez left the club and of course there existed a huge gap where Diogo Jota’s goal contributions once were – his tragic passing no doubt taking an emotional toll too. The effects of which cannot be measured. But the argument for such a dramatic overhaul of a team of reigning champions was less reasoned.
In its current configuration the squad is completely unbalanced. There is barely defensive cover if either Van Dijk or Konate – who looks ripe for a rest – need replacing, and the full-back department is insufficiently stocked too.
Alexander Isak and Wirtz appear lost. Was the latter not bought specifically for the task of unlocking teams whose defensive structure is a low block? Something about Slot’s recent admission does not tally here. “We haven’t found that answer yet,” he confessed. That is surely the manager’s job to fix.
Slow starts
Liverpool have conceded first in their last six matches in all competitions. In their last four league outings they have shipped at least two a game. And the timing of those goals has not helped either, each opener arriving no later than the 16th minute. Brentford scored in the fifth.
Games have quickly become a rescue mission and this fragile side, with its biggest names underperforming, don’t seem to be able to withstand the pressure. Liverpool actually have a worse goal difference than newly promoted Sunderland.
In fact, since clinching the title last season, they have won as many Premier League points as Sunderland – playing four games more.