Data from Opta's supercomputer now places the Gunners as second favourites, a drop from their top spot after their 1-1 draw away at Bayer Leverkusen on Wednesday.
The midweek fixtures proved disastrous for the six English teams competing, as none managed to secure a victory.
Newcastle and Arsenal earned draws against Barcelona and Leverkusen, respectively, while Liverpool fell to Galatasaray. Meanwhile, Tottenham, Chelsea, and Manchester City all suffered significant defeats.
Arsenal not favourite anymore
Prior to the first leg of the round of 16 tie, Arsenal were given a 26.7% probability of lifting the trophy.
However, with a challenging return leg ahead, their chances have now been revised down to 22.07%, as reported by the Sun.
This shift has allowed Bayern Munich to claim the top spot, especially after their commanding 6-1 first-leg victory over Atalanta.
As a result of their 3-0 loss to Real Madrid, Manchester City's chances of winning the competition have plummeted to a mere 2.27%.
The outlook is even more dire for Chelsea and Tottenham, who both trail by three goals against Paris Saint-Germain and Atletico Madrid.
Despite a 1-0 first-leg deficit against Galatasaray, Liverpool are rated as the next most likely English team to succeed, with a 4.46% chance of winning the tournament.
This places them behind Barcelona, PSG, Real Madrid, and Atletico Madrid in the overall rankings, with Bayern and Arsenal leading the pack.
Continued poor performances from English clubs in European competitions could also threaten the Premier League's potential fifth Champions League qualification spot.
While still considered unlikely, if other nations surpass England in the European performance spots, the race for a top-five finish will revert to a battle for only four places.