Edit: I might ask if a similar thing occurred in WWII. As I understand it, unlike in the first world war, there was still geopolitics going on that encouraged taking as much ground as possible. Is this the case?
Edit 2: I realized this was poorly asked when I got an answer that didn't answer my intended question but matches the stated one perfectly. -_- I've resubmitted it here https://www.reddit.com/r/AskHistorians/comments/5oxwq9/in_wwi_i_assume_the_armistice_was_not_an/
To the German high command, the loss of the war was obvious, and it was their actions that led to the Armistice. From early 1917 the German leadership knew the war was going to go against them, and the following year of so represented their enacting a risky, almost desperate, plan to win by knocking out Russia and then attacking the French and British in Spring 1918.
The failure of this offensive was recognised as the loss of the ability to win the war as German resources of all kinds ran dry.
Additionally, the German army could no longer hold its ground. After July-August 1918, emblematically from the 'black day of the German Army' at the Battle of Amiens, the Allies were taking ground wherever they attacked, and they landed blows all across the Western Front. German troops, feeling betrayed, politicised, and also understanding the futility of the war and seeing the arrival of the American army, became mutinous and ill-disciplined.
The Allies for their part realised Germany was teetering, but they saw a long fight still ahead: after all, they had only moved the overall front line a fairly short distance- indeed much ground was already well fought-over- and it was a long way to Berlin. And it was only a year since the bloodbath of Third Ypres.
Source: To Win A War: 1918, The Year of Victory John Terraine.