In real terms, less traffic means you’re seeing less clicks, right? Work backwards from there.
Has cost decreased? Or has it stayed the same and your CPCs are up for some reason, so less clicks for your budget? Maybe a new competitor has entered the auction or an old one is bidding more. If you’ve recently dropped your bids, maybe your CPC has decreased and you’re winning less auctions now. You’ll notice that Lost IS (rank) has increased if this is the case.
If cost has decreased (with CPC about the same), you’re either seeing less impressions or a lower CTR. If CTR changes on its own, you have to diagnose that one by just looking really. Did you test a new ad which is getting lots of impressions but CTR is poor? Maybe a new keyword where your ads don’t really fit the SERP? It’s a bit less obvious when you’re diagnosing CTR.
Then, if none of that explains it, maybe search volume has just decreased. If your total number of impressions has dropped but IS is the same, that means you’re getting the same-sized piece of a pie which has gotten smaller for some reason. It’ll be up to you to diagnose the reason less people are searching suddenly based on real-world factors affecting your business, but at least you’ll know where to start.