The orbiting satellite losses 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 that orbit.
Due to which the satellite moves down towards the earth into a lower orbit. In the lower orbit the potential energy decreases (become more negative) so that the K.E. correspondingly increases. That is why, the satellite describes a smaller orbit with increased speed. In fact, due to atmospheric friction, the satellite spirals down towards the earth with increasing speed and ultimately bums out in the lower denser atmosphere.