Next season maybe they're still capable of competing, but I'm pretty doubtful for the next season. Some Madrid players have entered old age. They must immediately make preparations to connect the team's struggles. If there are no new substitutions they will only slow down the regeneration.
It's pretty difficult, but all the clubs seem to have to go through that cycle. There are substitutions, so they decline and return to great or fail. If that is not done then The team will lose because there are too many old players who are getting less and more days will be reduced in ability.
What is clear is that Ancelotti has good plans for his team next season and I think he has planned it so far. Some of Real Madrid's older players might miss some easy games as Real Madrid will try to roll out some of their newer, younger players. So it's true that Real Madrid will regenerate its players gradually.
You and me have the same thought at this time about barcelona, indeed strengthening the team to face next season is an important thing to do, but I think barcelona should stabilize their finances first at this time instead of chasing new players for next season, the squad that barcelona has this season has actually been pretty good and it's proven if they can finish the season in second place, I think this season they can actually compete in the La Liga championship but Koeman bad strategy made them fall far behind at the start of the season.
I could feel a different atmosphere after Xavi became coach, I saw them playing more and more and it amazed me especially the way Barcelona played and connectivity between their players. Koeman didn't spoil but he just can't afford to manage a team like Barcelona because Barcelona is a team that is far more concerned with competition than just staying in Laliga for business.