Correct option is C. Assertion is correct but Reason is incorrect
The orbiting satellite loses kinetic energy due to atmospheric friction. Therefore, in a particular orbit, the gravitational attraction on the satellite becomes greater than the force required to keep the satellite in than the force required to keep the satellite in the orbit. Due to it, the satellite moves down towards the Earth into a lower orbit. In the lower orbit the potential energy decrease (become more negative) so that the K.E. correcspondingly increases. that is why, the satellite describes a smaller orbit with increased speed. Infact, due to atmospheric frinction, the satellite spirals down towards the Earth with increasing speed and ultimately burns out in the lower denser atmosphere.