The Chilean says that the Gunners' hunger has gone missing.
Wayne Routledge and Ashley Williams were on target for Swansea City, who came from a goal behind to beat the Gunners in North London last night.
It was a chance wasted as title rivals Leicester City and Tottenham Hotspur both dropped points that gameweek, with the Foxes still six clear of Arsene Wenger's side at the summit.
A chorus of boos greeted the players in red at full time, and Sanchez concedes that, at the moment, he and his team-mates just don't want it enough.
Sanchez scored twice when Arsenal demolished Manchester United earlier in the campaign, and the Chilean feels that level of enthusiasm has gone missing for them in recent months.
“I think we can win the Premier League with the players we have,” he was quoted as saying by the Evening Standard. “That said, we lack a certain hunger. We need to step out onto the pitch as if we're already 1-0 up.
“We lack self-belief, that we can actually be champions.
“I remember a game against Manchester United last year. The lads looked hungry for silverware as we took to the pitch. We crushed them in the first 20 minutes and went 2-0 up. We were hungry and brimming with confidence that day.”
It is win or bust for Arsenal on Saturday, with Wenger's men going to second-placed Spurs knowing that only a win will do if they are to have any chance of winning the title.
The Lilywhites also go into the derby on the back of a defeat, however, after losing 1-0 at West Ham last night.