The number of traders is increasing more than before as more people are generally becoming more interested in ways to become more financially independent and as thus in search of skills like trading.
Does the number of traders directly affect the volatility of the market? If it does, can we assume that trading was easier before with less traders (less volatility) than now when there are more traders, and the market more volatile?
What matters is the money pursuing a particular asset, so even if the number of traders went up but the average capital held by each one of those traders went down then the volatility will go down, and when it comes to the difficulty I would think that now it is way more challenging to make money with trading than in the past, as now professional traders are dedicating their time to trade the market of cryptocurrencies, which in return is increasing the average skill level of the traders on the market, and anyone that is below that baseline has no hope of making money this way.