Now the question arises, when will they return to their best form?
Currently City are like toothless lions who are having difficulty beating their opponents, they were not even able to beat Everton, let alone when facing a stronger team in the UCL. If Guardiola is able to improve his squad after taking advantage of the January transfer window, he must focus more on the domestic league to be able to compete again in the top four. I'm not sure City can survive much longer in the UCL, they will definitely lose when facing the favorites.
Among the teams that are called the best teams in UCL, I think City's performance in the domestic league is the worst compared to other top teams. PSG is ranked 25th in the UCL standings and that is worse than City. But their performance in Ligue 1 is quite good. Same as what happened to Barcelona. They lost surprisingly to some lower and middle teams in La Liga but their position is still in the UCL zone. Of course we can't compare between domestic leagues because each domestic league has different characteristics. I agree with the fact that the English league is the most competitive league if you look at the teams that compete. But City's poor performance will make them doubtful to survive in the UCL or qualify for the next round. Their position is still not safe enough at 22nd in the UCL standings but they still have a big chance to qualify for the playoffs if you look at the points of other clubs which are only 1 or 2 points different.