It is hard to expect Real Madrid to be at their best every season, last season was a success for them and this time they have problems with injuries and it has mostly affected their defense. After they lost Carvajal it was clear that this would be a big problem for Real, after another injury to Courtois it got even worse and after an injury to Militao that kept him out for the rest of the season it got even worse. It is obvious that now the weakest line for Real is the defense and this may not allow them to achieve anything significant this season.
In fact, it is quite normal to see a club get good results in one season and then decline in another season. But because they are Real Madrid we are a little unused to it. because they usually aren't as bad as they are now at UCL. Injuries to players in the back line really have a big impact on this team's performance. And it shows that this team doesn't seem to have mature enough preparation for their back line. But they have thorough preparation for the midfield and front line. This will be quite important homework to complete immediately. Because if Ancelotti doesn't immediately solve this problem then I don't think we should be surprised if this season Real Madrid won't be able to progress as far as in previous seasons in the UCL.
But I still believe this team will rise and will still go quite far. But I doubt they can still compete for the UCL title this season.