The Reds netted SEVEN times against their south London opponents to guarantee they will top the Premier League table on Christmas, with Ashton wildly impressed by Jurgen Klopp's side while working on talkSPORT's commentary team at Selhurst Park.
Takumi Minamino, Sadio Mane, Roberto Firmino (two), Jordan Henderson and Mohamed Salah (two) all netted against Roy Hodgson's Eagles, who wasted numerous chances in front of goal before the Reds ran riot to secure all three points in the most convincing of fashions.
They are now six points clear at the top of the table and have over a full week off before their next match - at home against Sam Allardyce's West Brom next Sunday.
And former Premier League ace Ashton believes Liverpool are starting to look 'ominous', with their stunning victory sending a message to their top-flight rivals.
He told talkSPORT: "When the fixtures come out, every team looks at this fixture away at Crystal Palace and thinks, 'that is going to be a tough game, they are going to make it really difficult'.
"To come here and win 7-0 in the manner that they have, I think does say a lot to the rest of the league in terms of where Liverpool are at mentally.
"And with players probably to come back in the next seven to eight days before their next game, it looks ominous."
Liverpool headed into Saturday's clash without a win in any of their previous five Premier League away matches, but they ended their poor run in incredible style.
And Ashton reserved special praise for Reds captain Jordan Henderson for driving his teammates on to ensure they were at the top of their game.
"He was on a different level, mentally, than anybody else today," added Ashton.
"In terms of the way he approached the game and expected his team, as captain, to approach the game and be at the level they need to be at to start these away games.
"Because of the poor away performances, it is as if he has taken it upon himself to say, 'you know what, I'm going to start and lead, and if you are not up with me or have the same intensity as me, I'm going to be at you and you're not going to enjoy playing alongside me'.
"I was just really impressed with that manner. But then he has the quality to back it up, as well.
"So a real magnificent performance from him."
Liverpool sent a statement of intent by thrashing Crystal Palace in their own backyard on Saturday lunchtime, Dean Ashton told talkSPORT.