I think Ancelotti understand the importance of timing and have seen that it is better to leave when he is still seen as a hero rather than when things have gone badly. He has made Real Madrid win trophy for most of the season and going a season without trophy might make him lose some of those admiration he enjoyed. This is the reason he might be considering leaving to ensure he do not spoil his reputation. I completely understand him and I will support whatever decision he takes.
Ancelloti has won almost every major trophy during his time as a coach and maybe a season without a trophy is not a big deal for his reputation. La Liga still has a chance that they can chase as long as they can make a much better performance because when they face El Clasico they can close the gap on Barcelona even though they will still be one point behind Barcelona.
I have never doubted Ancelotti's ability as a great coach, his collection of 5 UCL titles confirms his position which may be difficult for other coaches to match. It must be admitted, his failure in the UCL has greatly affected his position, especially since Real Madrid is currently 4 points behind Barcelona.
I think he is ready to accept the risk if Real Madrid ends the season without a title because the big demands of coaching a big club like Real Madrid will cost him his job if he fails to win the title.