I don't think it's ever as simple as "it was a fad" or "we've won" as some prominent right wingers have been declaring.
There are so many reasons I can think of for why the numbers might be dropping.
First of all, you will have the people who genuinely experience a strong sense of disconnect between what their body looks like and what they feel inside. People who genuinely believe that they should be male / female and want to be male / female and that there's an incongruence between that and how they were born - "true" trans people if you like, regardless of how you think they should be addressed legally, that's one category of people. I think it's incredibly small, but I do know people who I'd say fit that category.
You have people who are trying to identify out of something else or escape something totally different, and the idea of being trans came along at the right (or wrong, depending on your stance) time. I've detransitioned; I fell into this category. I wanted to change myself completely so I was no longer the child that was abused and the young adult defined by that abuse - changing my name and my hair and my clothing had become totally socially acceptable, and I didn't have to deal with questions as to why. I convinced myself that I was trans, because why else would I feel so compelled to change everything about who I was?
It took some massive deconstructing and therapy to realise the real source - but that isn't always easily available to people, and that's something I think we need to fix before we criticise people who identify as trans. I think this is a huge category of trans people, and writing them off as either attention seekers or pervs pushes them further into the trans community and makes them more likely to cut off those who can help them.
I think there are girls and boys (and men and women) who genuinely prefer things associated with the opposite sex, and it's a confusing time to fall into that category. The tradwife/gender roles movement is growing exponentially, especially in the US. There's still stigma in the UK about women deciding not to have children, or about men and women wearing clothes associated with the opposite sex. Then you have the other side which is, you can't be a cross dresser anymore without identifying as trans. The reason the pull of that side is so strong is that, in exchange for saying you're trans, you can continue to ignore sex based stereotypes and wear/do what makes you comfortable, so of course the pull to say "yeah whatever I'm trans" is there. There's nothing to draw them to the other side.
There are kids who are chronically online, who have very little community outside of their phone, who find a community and make it their entire identity. When I was their age it was filling your Bebo with quotes from My Chemical Romance songs that could be interpreted as a cry for help and self harming. The way the system responds is different - obviously no one at the time was saying "yes, go on, keep cutting", and that needs looking into - but the psychology is the same; there's nothing new about it. Many of those same teens might still have pronouns in their bio, but it's far less important to them than making their fur suits because they watched that show on Netflix (I can't remember for the life of me what it's called). They'll grow up and look back on that phase and cringe like we cringe at the emo phase and something else will have filled its void for the kids crying out for a community and a bit of attention.
Obviously, the elephant in the room, there are people - and they are usually male at birth - who identify as the opposite sex to enable them to carry out or get away with sex based crimes and unacceptable behaviour. To ignore this is foolish and by denying that this faction exists, the trans supporting community alienate a lot of people.
How trans people should be dealt with legally and socially and medically and all of that is another matter, but I do think both sides need a lot more critical thinking and to acknowledge that it isn't just a dichotomy of attention seekers and criminals.