The Reds suffered a 1-0 Premier League defeat against Arsenal last week, leaving them nine points behind the leaders, before losing their first Champions League match of the campaign against Fenerbahce in Turkey three days later.
Iraola admitted the results had affected the mood at Anfield but insisted his team must respond quickly when they travel to struggling Crystal Palace on Sunday.
"One week ago in this press conference, we were on a run, everything was in a good place, and we were in a better mood," Iraola told reporters on Friday.
"And now, two defeats, it changes, and it has to change. It has to be like this, in clubs like ours. And now we have to react. After two defeats, we need the win against Palace away."
The Spaniard, who took charge in June after replacing Arne Slot, acknowledged that inconsistent results were part of the challenge during his first season at Liverpool.
However, he warned against judging the team's overall progress on the back of two disappointing performances.
"When we lose a game everyone is angry but we have to have some perspective and we know in the process there will be ups and downs," he said.
"We are not as bad as we look today, we were not as good as we looked one week ago and we have to have some perspective."
Brighton midfielder Pascal Gross has played down talk of a Premier League title challenge despite his side moving into second place with a convincing 2-0 victory over Brentford on Sunday.
Xabi Alonso was left frustrated by Chelsea's lack of creativity and attacking quality after they suffered a disappointing 1-0 defeat to Sunderland in the Premier League on Sunday.
Andoni Iraola was delighted with Liverpool's response to a difficult week after they returned to winning ways with a 3-1 Premier League victory over Crystal Palace at Selhurst Park.
Michael Carrick has insisted he expects to remain Manchester United manager after the international break despite the club dropping into the Premier League relegation zone.
