The world number two squandered a 4-1 lead in the opening set before French Open champion Andreeva ran the table to clinch the match and seal top spot in Group 2.
"She definitely played great tennis," Sabalenka told reporters. "The good thing is that I still have a chance to qualify. The bad thing, that I'll need some time to recover after I don't even know how many games in a row I lost."
Sabalenka, 28, made the brighter start and broke Andreeva in the fourth game, but the teenager quickly shifted the momentum and exploited the Belarusian's errors.
"She's not easy to play, in any surface. It's not only Indian Wells," added Sabalenka. "She's moving well, spinning the ball quite high, especially in this condition."
Sabalenka said she was determined to respond in her final group match against Elina Svitolina, who kept her own semi-final hopes alive with a 3-6, 6-2, 6-2 win over Karolina Muchova.
"Although the things didn't go well today, I'm still super motivated," added Sabalenka.