Brendan Rodgers called Celtic's demotion to the Europa League a "huge blow" for the club, following a 3-2 penalty shoot-out loss to Kairat Almaty.
Celtic, who reached the Champions League knockout stages last season, drop into the second-tier competition after a goalless 210 minutes led to a nervy shoot-out in eastern Kazakhstan, where the game was staged 250 miles from the Chinese border.
Adam Idah, Luke McCowan and Daizen Maeda all saw penalties saved by Kairat's 21-year-old second-choice goalkeeper Temirlan Anarbekov, as they became just the second Kazakh side to earn a place in the Champions League proper.
Rodgers told Amazon Prime: "It's very frustrating. We showed a glimpse of what we can do at this level but we haven't been able to show that over the course of these two games.
"It's bitterly disappointing, because we were on the right track last season and working really well and playing really good football, so to not be in there this season is a huge blow for us. We missed a massive opportunity over these two games."
Maeda blazed over from a glorious chance in the 86th minute before Celtic were denied on a series of occasions as they finally began to dominate in extra-time, but failed to convert.
The delay in crucial transfer activity has taken its latest damaging turn, with the club paying a hefty price after failing to replace Kyogo Furuhashi and Nicolas Kuhn this summer.
Celtic have spent about £3million on transfers so far this summer, while bringing in around £20m - a sum similar to what they will miss out on following their failure to reach the Champions League proper.
Only two summer signings - Kieran Tierney and Benjamin Nygren - featured in Kazakhstan and the anticipated arrivals of Antwerp winger Michel-Ange Balikwisha and Boca Juniors left-back Marcelo Saracchi will come in the wake of fan anger.
Rodgers has been calling for attacking reinforcements since July, having missed out on a number of targets.
"We showed last year the strides I felt we took but you have to build on that," Rodgers added.
"The last thing you want to do in football is manufacture your own stress but all we can do now is look at where we're at as a football club and decide where we want to go.
"I thought overall it was a poor game. The pitch made it awful. We were defensively OK but couldn't quite make the breakthrough. We had good chances, especially in the second half and extra-time, and when it goes to penalties anything can happen.
"We just have to reflect on opportunities that we didn't take and we have to settle for the Europa League."
Celtic 'gamble' backfires on 'sobering night'
Former Celtic defender Mark Wilson speaking on Sky Sports News:
"It's tough to explain, there will be a lot of questions and fallout with a narrative of a lack of investment. There's a young right-back that finishes the game, a young centre-back, a centre-back at left-back.
"There are questions that need to be answered. Did the Celtic board gamble on the players that they've got to get them through?
"It's backfired dramatically and they pay the price. They've been poor over 210 minutes of football; created very little. Kairat were robust, made it difficult and they've got their reward. It's a real sobering moment for Celtic."
No sympathy for hopeless Hoops
Analysis by Sky Sports' Laura Hunter:
It's hard to have much sympathy for Celtic and Brendan Rodgers after such a severe underperformance across two sets of woeful 90 minutes. They only have themselves to blame. And when the tie went to penalties, the sense of foreboding was overwhelming.
Kairat, a team in complete European obscurity until now, had more efforts on Celtic's goal on the night. For everything they lacked in quality, they made up in heart and spirit. They won more tackles, made more interceptions and completed more clearances. They won the duel count 75-63.
The Celtic board's unpopular decision to wait to do transfer business until Champions League qualification was secure has been rendered ridiculous. Rodgers will be rightly upset by that. But he still needs to inspire more from the players he does have.
To create so little against a team with so much less pedigree is inexcusable. His currency has got to be at its lowest since he rejoined the club back in 2023. Tough conversations ahead.
