Djokovic says 'been a great ride' after Melbourne final loss
The 38-year-old Serb crashed in four sets to the 22-year-old Spaniard at Rod Laver Arena in Melbourne.
It leaves Djokovic stuck on 24 Grand Slam titles, equal with Margaret Court and one short of the all-time outright record.
Afterwards he admitted he had not expected to reach a major final again and suggested the future was uncertain.
The former world number one has not always had an easy relationship with the fans in Melbourne, but told the crowd: "I want to just say in the end that you guys, particularly, the last couple of matches, gave me something that I have never experienced in Australia.
"That much love, support, positivity. I tried to give you back with good tennis over the years."
Djokovic, whose last major final was defeat to Alcaraz at Wimbledon in 2024, added: "I must be very honest and say that I didn't think that I would be standing in a closing ceremony of a Grand Slam once again.
"So I think I owe you the gratitude as well for pushing me forward throughout the last couple of weeks.
"God knows what happens tomorrow, let alone in six months or 12 months. So it has been a great ride. I love you guys."
Djokovic's last major crown was the US Open in 2023 and he has seen world number one Alcaraz and number two Jannik Sinner dominate men's tennis since.
However, he beat Sinner in five gruelling sets in the semi-finals, and said Sunday he considered reaching the title-decider to be "an incredible achievement for me".
"Of course, after a loss it's a bitter feeling, but nevertheless, I have to be content with this result," said Djokovic, a record 10-time champion in Melbourne.
It is the first final there he has lost.
He said that beating Sinner had been "encouraging", but added: "You know, not enough for me. Yeah, let's see.
"I'm going to keep pushing and see if I get another chance."
Djokovic had some lucky breaks in Melbourne.
His fourth-round opponent, Jakub Mensik, withdrew injured and he was facing defeat in the quarter-finals when Lorenzo Musetti had to retire hurt.
With age and injury catching up with Djokovic, he conceded that he has "lowered my expectations last couple of years".
"I think (that) allows me to be able to let go of some of that unnecessary additional stress," he said.
"It also feels good a little bit not being always the main favourite to win Slams."