Rangers manager Walter Smith insists Celtic's plight has been blown out of proportion ahead of tonight's Old Firm derby.
The Hoops' hopes of a third consecutive championship were written off in some quarters after losing to Rangers at Ibrox last month, before succumbing to Motherwell at Parkhead in their next match.
A win for Rangers in the east end of Glasgow would provide them with a seven-point lead at the summit of the Clydesdale Bank Premier League with two games in hand and even Smith concedes a realistic challenge from Celtic would then be unlikely.
But the Gers boss is equally aware victory for the Hoops could provide the morale boost they need to mount a late push for the SPL crown.
'Like everything else in Scotland, the situation Celtic find themselves in gets exaggerated,' he said. 'We have made a challenge this year and after winning the first two Old Firm games, which were on our ground, the whole thing has been exaggerated.
'I'm not trying to use any psychology. I do genuinely believe they are as good as any of the teams we've faced in Europe.
'In Scotland things can get blown out of proportion because I think reaching the last 16 of the Champions League is a terrific achievement and that's the measure of Celtic as a team.
'We have to remember that we are trying to aspire to what they already had which is league championships and qualification for the Champions League.
'Everybody can think what they like, but that's where we are and Celtic are a very good team.'
Celtic manager Gordon Strachan has never fully won over a section of the Parkhead support and has found himself under increasing pressure in recent weeks.
But, when asked if he has any sympathy for his opposite number, Smith insisted: 'I don't think he needs my sympathy. I don't think he needs anybody's sympathy.
'He maybe needs a bit of understanding. It's a lot quicker nowadays from when I was first here. Assessment of teams and of others is a bit quicker although maybe I'm slowing down.'
Rangers remain in the hunt for a total of four trophies - including the UEFA Cup - but Smith refused to prioritise ahead of such a vital SPL clash.
He said: 'As a manager do you concentrate on one to the detriment of the other? But what happens if you don't win the other one? You end up with nothing so you have to concentrate on every game as they come along.
'It's dangerous to look any further.'
Meanwhile, Steven Davis has revealed he would be willing to hold talks with Rangers over his future at the end of the season.
The midfielder has been a hit since joining on loan from Fulham in January and Smith has expressed a desire to retain his services beyond the summer.
'Once the season finishes I will go away, have a break and hopefully sort out my future after that,' said Davis. 'What I can say is that I will listen to Rangers first. If they are an option then it's something I will consider.
'I don't know why Fulham let me go when they did. Before I came here I'd started almost every league game but then there was a change in manager.
'I was out of the team and when I heard of Rangers' interest in me I went to see the new boss. I didn't think he would agree to the move but he did and I'm so glad I came.
'I've been able to add to the quality that was already here and things have worked out well.'