Yes Real Madrid has good chance of doing well in Champions League. They have been successful in past especially when they won title recently which shows they can handle pressure. If they can get through next round and make it to quarterfinals and semifinals, they will definitely be strong team. Real Madrid usually plays very well in big games and possible game against Liverpool would be very exciting. Even though we can not know for sure what will happen Real Madrid experience and skill make them strong team that could go all the way.
Yes, Real Madrid has a chance to do well in the Champions League but based on their recent performance, they need to improve their performance further. Although they are a very strong team, yet their current performance does not reflect the influence of a strong team among them. According to your statement, Real Madrid usually plays very well in big games, but we haven't seen that recently. Real Madrid had previously lost against Barcelona and Liverpool, but those matches were very high-voltage and big matches. So it's never certain that Real Madrid can play well in big matches. This team is still far down in the UEFA Champions League points table, so there are still difficult challenges for them.
Real Madrid remains a serious threat to every opponent in the UCL league, even though Real Madrid started the UCL match poorly. However, with a performance like against Red Bull Salzburg, it seems that all Real Madrid's future opponents will be destroyed. But for some reason, every time they meet Barcelona or Atletico Madrid, Ancelotti's line is always chaotic and Real Madrid's killer instinct has decreased drastically. Ancelotti must immediately realize this and stop using Tchouameni as a CB in the line up because he is better if he plays in his original position.
Now Real Madrid rose to 16th place after a landslide victory over Red Bull Salzburg at the Bernabéu yesterday. With one match left in the UCL league phase and only one or two points away from the top 8, of course Real Madrid's chances of qualifying for the next round without going through the play-offs depend on other teams. Even if Real Madrid qualifies for the next round through the play-offs, it does not make Real Madrid underestimated, Real Madrid is still Real Madrid if they are in the UCL league, they are hard to stop even though they started the UCL league badly but they always make surprises, suddenly they become UCL champions.