Alonso, who finished almost 90 seconds adrift of winner Lewis Hamilton in Barcelona, feels the narrow streets of Monte Carlo will negate some of the Mercedes power advantage and make its drivers more vulnerable than at any stage so far this season.
"This year I think Monte Carlo will be one of the few possibilities to challenge Mercedes, especially for Red Bull," Alonso told reporters after the Spanish GP.
"In the corners they are very fast but on the straights they seem to lose a lot of lap time.
"In Monte Carlo there are no straights so Red Bull could challenge Mercedes there."
Alonso also emphasised the need for Ferrari to remain optimistic of bouncing back from what has been a difficult start to its season.
"We cannot go to Monte Carlo and Canada thinking third place is our target," Alonso added.
"It is true the world championship is in their [Mercedes'] hands.
"They have a big advantage, [but] I think it's not any different to any sport, or any racing over the years - we can fight.
"We go to Monaco and Canada thinking we need to do better and fight to improve our performance.
"We need to have a strong weekend and get some good points."
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