Covid-19 is now rampant in Irish communities, the head of the HSE has said.
Paul Reid said a whole set of "worst-case scenarios" have come together to create "explosive impacts".
"The virus is absolutely rampant now in the community, we know that for a fact," he said.
"Everybody is extremely high risk now of contracting the virus. We really need our vulnerable groups to be on our highest guard, everybody. There's no doubt our health service is on what we would call high alert."
He urged the public to stay at home and adhere to public health advice.
"We really need everybody to take the real appropriate actions that we're calling out to everybody to do, which in essence is retract. Retract back to our homes, reduce our contacts drastically and really protect ourselves in the coming days and weeks."
His remarks come against the backdrop of soaring case numbers, rising intensive care levels and deaths linked to the disease.
Nphet has warned there are about 4,000 positive cases in the past few days that have yet to be officially confirmed.
On Thursday, another 12 deaths linked to Covid-19 and an additional 1,620 cases were confirmed.
As of 8am on New Year's Day, there were 508 patients with Covid-19 in hospitals across the country, including 42 in intensive care units.
Mr Reid said: "The real picture over the last few days is most likely getting close to 3,000 cases per day.
"So, when we get to these levels it has a severe impact across a whole set of areas, not just our systems, the health service, and the volume that any system can cope with."
He added that 35,000 swabs had been taken on New Year's Eve alone.
Asked whether the HSE's decision not to test close contacts for the virus was a sign the system had failed, Mr Reid said it was not and that they had to make the decision to "prioritise for the most symptomatic people" as the demand for testing soared.
People who are close contacts of positive cases are still being asked to restrict their movements for 14 days.
Chief medical officer Dr Tony Holohan said public health actions had moved from containment to mitigation because the disease is no longer in control.
He tweeted: "We have very high levels of community transmission of #Covid19. We find, test and trace to isolate cases/restrict contacts as CONTAINMENT or 'control' actions. With the disease now not in control, we focus our public health actions on MITIGATION."
He said mitigation of the virus means focusing testing on the symptomatic; asking those with symptoms, waiting for a test result or who have tested positive to self-isolate for 10 days; advising close contacts to restrict movements for 14 days; and asking all others to stay at home.
Meanwhile, the Foreign Affairs Minister warned it may be necessary to extend Level 5 restrictions past the end of January.
Simon Coveney described the challenge ahead of trying to tackle the latest wave as a "significant one".
"We have taken the decision in a way that's consistent with Nphet to move to a full Level 5 set of restrictions until the end of January and it may be necessary to go even beyond that," he told RTÉ Radio 1's Morning Ireland programme.
Mr Coveney rejected claims that the reopening of hospitality and allowing home visits in December was a mistake and caused the surge in Covid-19 cases.
The Fine Gael minister said it was a "misreading" of the situation to suggest there was a divide between the National Public Health Emergency Team (Nphet) and the Government.
Speaking to RTÉ Radio 1's Morning Ireland, he said the relationship between Government and Nphet, and the decisions that have been made in the back of that relationship, by and large, have saved many many lives and have kept the spread of the virus under control where possible.
"Of course, there have been some mistakes made, but we are now in the teeth of a third wave and Nphet and Government are working together, but Government must make decisions," Mr Coveney said, adding Nphet's advice is taken seriously by ministers.