The Reds icon has questioned why his former side bought the Italian but thinks they will also struggle to offload him.
The 24-year-old has failed to adapt to life at Anfield so far, scoring just once this season - in the Champions League against Ludogorets.
Carragher has already stated his belief that the striker will no longer be on Merseyside next season.
And, writing in his weekly Daily Mail column, the former Liverpool centre-back defended Balotelli somewhat in regard to his by now infamous shirt swap with Real Madrid defender Pepe - but felt the 'bigger picture' is less promising for the Italian.
"On this occasion, he genuinely looked to be minding his own business and had not walked off the pitch pestering Pepe. All he has been guilty of on this occasion is naivety.
"If he had walked another three or four steps down the tunnel, we would never have known. If he had thought properly, he could have done what Steven Gerrard did with Alvaro Arbeloa and taken Pepe’s shirt after the game.
"Looking at the bigger picture, though, his form and body language have been as underwhelming as it was when he played for Manchester City. So why did Liverpool buy him?
"I am not alone in thinking he will not be at Anfield next season and that raises another question: how do they sell him?"