In a disappointed, discouraged, or dispirited manner, with the feeling of having failed or been defeated.
From crestfallen (disappointed, with fallen crest, from medieval idea of crests rising with pride and falling with shame) plus -ly to create an adverb form.
The metaphor is beautiful—a bird with a raised crest looks proud and alert, so a 'crestfallen' bird (crest drooping) shows disappointment, which is why this word captures sadness so perfectly!
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