A cold crypto winter would be one of the reasons behind the shutdown of Localbitcoin, but I don't think this is the main reason. There would be some law enforcement issues as well. It's true that their volume has dropped due to the many competitors on the market. Especially centralised exchanges like Binance started p2p exchange. A large number of cryptocurrency users have been involved with centralised exchanges, and often we get all services in one place. Hence, individuals lose their interests in other p2p exchanges because of centralised exchanges.