Hey everyone - I'm relatively new, and recently hit a green campaign. That being said I think I'm also entering my first bidding war, at least on this traffic source.
Is there any other reason that traffic could be dropping off at a certain hour like this screenshot other than someone bidding higher at those hours? Any tips on combatting it?

Traffic fluctuates during the day and the drops can be huge when the night hits for example, but this really looks like you might have a competitor who is day-parting and targeting certain hours. What time is it in the GEO that you are targeting, when this drop happens? In case it's night hours, the drop can be huge, but if it's not, you have a competitor or more of them 
Its mid afternoon at the dropoff. After some bid testing, it appears to have been a competitor....
I tend to see drops around lunchtime and shortly after. Seems like you identified it though...
Yup, there is a drop around lunch in most GEOs, but its more of a mild decline and not such a dramatic nosedive as in your case.