Is it because of the match Real Madrid lost to Valencia that you are thinking Barcelona is in a good form than them?, I thought so before but since real Madrid picked form I never saw them that way again, though they might be having bad performance sometimes but they are actually a very big contender, from their points Barcelona just got higher because of the Valencia wining if not there would have been a bit of the same point with Barcelona, however Real Madrid and Barcelona are not just the only highest on the La Liga but also on this about to played Copa del ray finals because the both are going to face each other's and afterwards they would meet again for the La Liga.
In my opinion, Real Madrid have certainly regained some form after that match lost against Valencia.
Real Madrid's advantage is that they know how to take the blows and immediately try to improve afterwards.
Barcelona are doing well, but we can never underestimate Real Madrid, it would be a very stupid mistake.
It will certainly be an exciting challenge.