However, I think it is too early for bookmakers to back them to retain the European title come next season when the summer transfer window isn't yet over. Real Madrid has Jude Bellingham which brings more quality to their already intimidating midfield and if they can sign another prolific striker that can be capable enough to fill in the boots of Karim Benzema then I think Madrid will be the club to look out for come next season
If we consider Real Madrid then of course, they always have a good chance to be a candidate for title-winning team. What's more, next season is Ancelotti's last season at Real Madrid, so it is likely that Ancelotti will maximize this opportunity to be able to bring Real Madrid to the Champions League trophy. Indeed, to achieve a goal or a sweet and good ending is not easy, but because Real Madrid and Ancelotti have good qualities then of course they might be able to achieve that goal.
I doubt that Ancelotti will maximize anything more next year than he did ever before in his career because this is his last year. He didn't hold back last year, it was just not their time and there was a team that was better than them. It didn't happen to them for the first time. But it could set free some extra motivation within the team in the big games, having in the back of their heads that this is the last year for Ancelotti. But yes, they are a title candidate regardless of who the coach is and how old the coach and when he will stop coaching is of course.