Sunday's loss at the Santiago Bernabeu was the seventh competitive game without a win for Bilbao in all competitions, a run that stretches back to August.
Valverde's side never looked threatening against the force of Real as a Cristiano Ronaldo hat-trick and two from Karim Benzema left them in the bottom three after the opening seven matches.
But with 13 days until their next league fixture, the head coach wants everyone at the club to assess their plight and work on improving their fortunes.
"We need to stop, examine the situation and make efforts to change something," the 50-year-old Valverde told AS.
"We're a different team, we all have to look at ourselves and find character even though we're up and down [in form].
"The league is long and we have started badly, this has to go forward."
Valverde acknowledged his side were second best in the Spanish capital but remains convinced they can turn their form around, starting against Celta Vigo on October 18.
"Madrid were far superior to us today and I admit that," he added. "You could see the difference between the teams. But we will come back.
"It's a difficult time at the moment.
"We can regroup. That is what has made us strong."
