There are a couple of different factors at play. One was certainly an under estimation of Soviet capabilities. Bear in mind that the Germans were not particularly ignorant of Soviet capabilities, they had worked together in the 1930s to develop doctrine and equipment. However, this information would have been colored by the knowledge of the officer purges, the effect of which was demonstrated to satisfaction when the Sovuets had a crack at Finland. If the Finnish could do so well against the Soviets, the Germans wouldn't have any trouble, right? Besides, Intel was't viewed as a prestigious billet in the German system.

The second problem was an over estimation of their own capabilities. In an astounding lapse of Getman staff process, they basically ignored their own logistics experts, who made an incredibly accurate assessment of just how deeply into the USSR they could support an invasion: About 700 miles.

If you have a bit of time, the US Army's Command and Staff college has a presentation by their resident historian which covers this topic. For the short version, skip to part 3/8 on the playlist

https://m.youtube.com/playlist?list=PLkGvnfy3IadOjuaBI2fYW4jHM9B-cI_WK