Barca surprisingly lost 1-0 at Getafe on Saturday and conceded ground to Real, who thrashed neighbours Atletico 4-1 in the capital’s derby clash.
That means Pep Guardiola’s side are six points adrift of their fierce rivals for the first time in the Catalan coach’s reign, but Alves claims the difference means little at this stage.
“Many would hand the league over to Real Madrid now and they are letting off fireworks,” the Brazilian said at a press conference on Sunday.
“But the challenge is exciting and it fascinates us. And luckily for us there is still a long way to go.”
Nevertheless, Alves thinks Barca could be in trouble if they lose the forthcoming Clasico at the Santiago Bernabeu, which will be played on December 10.
“A nine-point difference, if we lose at the Bernabeu, would be tremendous,” he explained.
“There is no margin for error, but we will go there and compete as we know how.”