Red Bull boss Christian Horner says his team knows it has "an issue" and needs to improve to fend off the McLaren threat.
The reigning world champions hold a commanding lead of 70 and 30 points in both the drivers' and constructors' championships respectively.
However, the Milton Keynes squad is now without a win in five rounds and Max Verstappen has admitted its form is "alarming" after McLaren's Lando Norris won the Dutch Grand Prix by over 20 seconds.
Speaking in the post-race press conference at Zandvoort, Verstappen said: "This weekend was just a bad weekend in general. So we need to understand that. But the last few races already, they haven't really been fantastic. So that, in a sense, was already a bit alarming.
"But we know that we don't need to panic. We are just trying to improve the situation. And that's what we are working on. But F1 is very complicated."
Verstappen's order not to panic was repeated by Horner, who hailed McLaren's resurgence and admitted his team needs to improve.
He said: "Based on [the] performance, if it was like that at the next nine races, yes, it would be very, very difficult. But it's the fourth time this year, only the fourth time, that Max's points lead had reduced. It's only Lando's second win.
"But we know we have to find performance. So we were 78 points, now we're 70 ahead. We want to make sure that we extend the lead, not see it continuously diminish.
"Obviously they made a step a little while ago and their car here particularly with Lando was very impressive. So, we need to understand where and address our deficit."
Horner also explained that McLaren's improvement, coupled with his team's dip in form, showed the nature of Formula 1 and how quickly the tables can turn.
He added: "Well, it just shows that things have moved very quickly. I mean, we were winning races by 20, 25 seconds and Stefano [Domenicali, F1 CEO] was asking us to slow down in the first five races.
"It can change very quickly and that means it can change back the other way as well.
"We know we've got an issue. You can hear that Max didn't feel that the car was responding to what he wanted. We've obviously got to be able to manifest that into a setup that works these tyres across all conditions.
"McLaren did that with Lando. We weren't able to, but we limited the damage by 'if you can't win it, finish second'."
Additional reporting by Ronald Vording and Erwin Jaeggi
