To dream of observing something may reflect your impartial feelings towards a situation. A situation or other person’s behavior that you are becoming aware of. Watching and learning from something that has never happened before. It may also reflect your self-awareness of your own actions.
Negatively, observing yourself may reflect an awareness of your bad behavior or personal problems. Letting something bad happen on purpose. It may also be a sign that you are not doing enough to fix a problem or stand up for yourself.