I think declining volume is fine as long as the transaction volume and hash rates continue to trend up. [...]
Hashrate (increase) usually follows price increase, the two can't been seen separately. Transaction volume in Monero and other alt coins is probably still mostly people speculating (moving their Moneros to and hopefully from exchanges).
A declining volume does not affect price per se, but it does indicate a lack of traders' current interest. Their focus is apparently elsewhere.
To me a declining volume over an extended period of time could become a worry. Although a declining volume of development and research would be a much greater worry. Which fortunately is not the case for Monero, the opposite I would say.