The Catalan side host the first leg on Tuesday on the back of five straight wins, a run started by eliminating Manchester City from the competition and featuring a 4-3 victory at Real Madrid to boost their domestic championship hopes.
Barca trail leaders Atletico by one point with seven games to play.
"We are now in a better state than at this time last year. We have been up and down a bit in some competitions but the team is in good spirits," Alves told a news conference on Monday.
"We are in our best form of the season and in a month everything will be decided."
Ahead of their second-leg clash with City this month there was talk of a crisis at Barcelona. They went into the game having lost two of their previous three league matches and Alves said he was angry at the way the situation was taken out of context.
"If I look back five years ago this team was in a chaos and then 15 days ago we lost a game and it was as though it was a disaster," he said.
"People were saying Barca had lost the league and it was now between Atletico Madrid and (Real) Madrid. Then a week later Madrid are out and it is between Atletico and Barca. It is necessary to be more objective.
"Our style is always to attack. We don't try to be like normal teams but a side which influences kids and looks to play and win matches.
"To do that you have to take risks. We have been at the top of football now for the past five or six years but we know that if we win it is fantastic and if we lose it is a disaster."
The three meetings between Barca and Atletico so far this season have ended in draws, two of which came in the domestic Super Cup which the Catalans won on away goals.
"There is no point looking back at the other games now (against Atletico) as they were in other competitions and at other times," Alves said.
"We are rivals with different ways of playing, both valid and we are trying to get a good result to go into the next leg."
Atletico striker Diego Costa, Alves said, was one player he would gladly play alongside at Barcelona.
"If I could pick one player from Atletico to have in my team it would be Diego Costa for his goals and his work," the Brazilian said of the player with 25 La Liga goals to his name this season.
"It is going to be a difficult game and Atletico are a lot more than just Diego Costa. He is a great player and makes a difference for Atletico at the moment but they have other strong players.
"They have a strong structure and a difficult style to play against. It would be a mistake to just look at him."