Real Madrid is too tough in the Champions League, they can't be denied that they can perform better when they need a win to advance to the next round. This season is also the same, they are very strong and I don't think anyone who is against them will be confident when facing Real Madrid.
But in general, there is always a surprise that is what makes bettors get high odds. But the fact is that Real Madrid is very focused when playing in the Champions League, especially they have to go through the play-off round, of course they will focus all their strength to win it. Ancelotti is not worried about the opponents they will face, they will try that's what he said while convincing their performance will be better if everyone works together.
Real Madrid is known for being very strong team in Champions League and they deserve that reputation. They are good at winning important games when it really matters. This season they seem just as strong and it is no surprise that other teams might feel little scared of them. But Champions League is always full of surprises and sometimes teams that are not expected to win can pull off an upset. Real Madrid is very focused and determined especially with Ancelotti as their coach and that will probably help them do well. With stressing importance of working together as team Ancelotti is helping to set positive tone for the rest of the season.