As the dust began to settle on a dismal afternoon for Celtic at Ibrox, there was a line from Martin O’Neill’s pre-match media conference which sprang to mind.O’Neill had been reminiscing about his first spell as Celtic manager, when a 6-2 demolition of Rangers in the first Old Firm derby of the season was followed by something far more sobering when the sides met again.‘The second one wasn’t that good,’ reflected the veteran boss. ‘We got mauled — absolutely bleached 5-1 at Ibrox.’The final scoreline may not have been quite as emphatic on Sunday, but the sentiment rang true. For Celtic, a 3-0 hammering in the Premier Sports Cup quarter-final bordered on humiliation.It was three going on four or five. Since emerging from financial ruin and climbing the leagues just over ten years ago, rarely have Rangers dominated their bitter rivals in such a fashion.The personal duel between Dan Neil and Callum McGregor in midfield felt emblematic of the shift in dynamic; Neil the captain and heartbeat of the Rangers midfield with two goals, McGregor powerless and error-strewn in a fixture he has so often dominated over the years. Celtic manager Martin O’Neill and his assistant Shaun Maloney suddenly have plenty to ponderThis was the kind of defeat which could leave a mark. Not just bruises and scar tissue, but a warning that the foundations of Celtic’s position at the top of the league could be more fragile than the table suggests.With folded arms and a furrowed brow, O’Neill stood in the dugout looking every one of his 74 years as Neil’s second goal curled into the top corner to make it 3-0.On the field, McGregor could be seen saying to his team-mates: ‘No more goals’. He knew they were beaten. It was just a case of stopping the bleeding. An exercise in damage limitation.Likewise, O’Neill has seen enough of these fixtures over the years to know when his side have been second best in every meaningful department.In his post-match comments, he did not attempt to dress it up. ‘We were well beaten,’ he admitted. ‘We were second best. Hopefully, it’s a wake-up call.’O’Neill’s words were blunt and honest. For Celtic supporters, perhaps even a little unsettling. Why should the players have needed a wake-up call after the humiliation against LASK in Austria a few weeks ago?For that is the obvious reference point. In their two biggest matches of the season thus far, Celtic have been a shambles and lost them both by an aggregate scoreline of 8-1.O’Neill’s role in this warrants examination. Last season, he brought a calm sense of authority to Celtic in what had been a campaign of chaos and crisis. He gave them exactly what they needed in that moment and would eventually finish the season by winning a league and cup double. Callum McGregor and Liam Scales react as Dan Neil races away to celebrate making it 3-0This Celtic squad now require a different skillset. With so many new signings and no obvious style of play as of yet, they need quality coaching. Can he really deliver that along with Shaun Maloney and Mark Fotheringham?At the moment, their game plan amounts to little more than a misguided notion that they can beat all the other teams in Scotland purely because they have better players.Celtic created almost nothing of note on Sunday. Ivor Pandur had very little to do in goal for Rangers. Had he spent the afternoon sat on a chair reading a good book, his team would have fared no worse.As was the case against LASK, Celtic failed to cope with the energy and aggression shown by Rangers. A midfield three of McGregor, Mika Baur and Benjamin Nygren looked weak and flimsy.Baur may well go on to become a decent signing for Celtic but the balance of the midfield alongside McGregor and Nygren looked hopelessly unsuited to an Old Firm derby.At the top end of the pitch, Kasper Hogh, another of the summer signings – and the most expensive of all at £11million – spent the majority of the afternoon in Olwethu Makhanya’s back pocket.O’Neill spoke of it being a culture shock to some of the new arrivals and about lessons needing to be learned around the magnitude of this fixture.The obvious concern for Celtic is whether the penny drops in time for the league rematch at Parkhead this coming Sunday. Rangers striker Kevin Kelsy scored on his Old Firm debut as the Ibrox men gained momentumAll of a sudden, in what was by far and away their best performance under Derek McInnes, Rangers looked coherent, physical and purposeful. It was the performance of a team that had finally found its identity after a turbulent start to the new campaign.McInnes earned his first derby win as Rangers manager in emphatic fashion. The absence of Celtic supporters only amplified the sense of home dominance, but it does not excuse the performance from O’Neill’s side.Celtic’s domestic form had been strong until this point: six wins from six in the Premiership, 18 points, goal difference of +11.The table still shows them clear at the top. Rangers sit on 13 points from the same number of games. Hearts, on 12 points and with a game in hand against Falkirk tonight, are nicely poised and building momentum under Wouter Vrancken.The reality is that if Celtic were to beat Rangers on Sunday, they would go eight points clear of their rivals before the end of September. By any estimations, that would be a big gap.The numbers might still favour Celtic. The manner of this latest defeat most certainly does not. The ramifications for the title race are already being discussed in those terms.A three-way contest no longer feels fanciful. After overcoming a shaky start in their European fixtures, Hearts have been scoring freely and looking organised under Vrancken. Celtic skipper McGregor insisted his side lacked the fight and desire to get back into the gameRangers have now taken a significant psychological step with this result and will travel to Celtic Park next weekend with genuine belief.Celtic remain the team to beat but the margin for error has narrowed. One poor afternoon against their bitter rival has opened the conversation that many assumed was closed after the opening weeks.O’Neill’s side have already shown vulnerability in the biggest fixtures this season. The European exit still lingers. The heavy concessions in high-stakes matches form a pattern that cannot be ignored.Likewise, the fact that they had actually been giving up so many chances in matches against domestic opponents. As McGregor correctly noted, a result like this had been coming.Domestically, they have found ways to win, sometimes without hitting top gear. Against Rangers they never got out of first.O’Neill’s tactics and team selection will rightly come under scrutiny. Sebastian Tounekti was an empty jersey on the left wing, whilst Sam Johnstone looked nervy and unconvincing in goal.For Rangers, the win changes the narrative. A first Old Firm victory delivers credibility and momentum to McInnes and his players.More importantly, it gives the squad belief that they can not only compete with Celtic, but dismantle them in emphatic fashion. Five consecutive wins heading into the Parkhead fixture is a solid platform. Hearts look resurgent under new manager Wouter Vrancken and could have a say in title fightHearts’ position adds genuine intrigue. A side capable of taking points from both Glasgow clubs would transform the season into something more open than the traditional two-horse narrative.There is already an argument that Hearts are a better team than they were last season. Certainly, from an entertainment point of view, some of the football they are playing under Vrancken is bold and adventurous.Whether or not their squad is as good and as deep as it was last season remains to be seen, but they already look like they could be genuine challengers once again.Hearts’ form suggests they are not merely making up the numbers. Celtic’s perfect start bought them a buffer. That buffer still exists, but it looks a whole lot thinner after 90 minutes at Ibrox.O’Neill’s post-match tone struck the right notes – acceptance, responsibility, a demand for improvement. He recalled his own early experiences and framed this as a learning opportunity rather than a crisis. That is the language of a manager who understands the unique pressure of this fixture.Yet the performance itself left little room for comfort. Celtic looked weak in the areas that matter most when the stakes are highest: intensity, decision-making under pressure, and the ability to impose their usual control. Celtic’s vanquished players troop off the field at Ibrox after being schooled by their rivalsThe title remains Celtic’s to lose. But Sunday exposed a side that can still be overpowered when the opposition matches their aggression and executes with greater clarity.Rangers did exactly that. Hearts are waiting in the wings with their own ambitions – and every other team in the Scottish Premiership should also have taken note.Next Sunday at Celtic Park will tell us more. A reaction is expected. O’Neill will demand one. Whether this 3-0 loss becomes a temporary setback or the moment the title race properly opened up depends on what follows.For now, the inquest has begun, and the questions are sharper and more probing than the league table alone would suggest.Celtic have been given their wake-up call. The rest of the season will reveal whether they were listening.