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Arsenal are very good no doubt, but I don't think they can cope with the pressure that the European champions league brings, although when you look at their stand at the premier league level they are actually very good but at the European level they have always been trying really hard to meet as even the likes of an average team like sporting Lisbon and benfica of the Portuguese league can knocked them out.
The Champions League is never the same as the domestic league, so of course the pressure and atmosphere are different.
The teams that compete in the group stage are the best teams representing their respective countries' domestic leagues, so it is only natural that they play with great enthusiasm to beat each other even though their club ratings are not as high as the ratings of top teams like Arsenal.
Besides, Arsenal so far has been better than Arsenal in the last few seasons, I mean the performance of the players has been very good and Arteta has made his team look stronger. Arsenal just need a stronger mentality to compete in a competition as big as the Champions League, but their success in winning the title really depends on their performance.