There may be many reasons for it. Have you checked the bounce rate? If the bounce rate is high it might be bot traffic. As you said direct traffic there are chances you might get a visitor from referrals.

If the domain is same you can do 301 redirect of top pages (old website) that ranks higher to the newer version of the web page.

Secondly, without affecting your ranking you can move your old website pages to a newer domain also. This works if you want to change domain without modifying the sitemap and individual URLs of your website.

Make sure you have the search console access (verified) to both the website domains, Back-up your website and database(s) to restore in case of any error. Launch the website in the new domain.

Do 301 redirect via your site’s .htaccess file (At the old website host). Use the code below

RewriteEngine on
RewriteCond %{HTTP_HOST} !^www.newerdomain.com
RewriteRule (.*) http://www.newerdomain.com/$1 [R=301,L]

Once this is done, then login to Google Search Console and go to the old domain settings icon. There will be an option called "Change of address" click it and select the new domain. Now go to the new domain property and add XML sitemaps to Google.

That's it!

As your website got ranked in top positions use subfolders, let's say for an example if your primary domain in English is abc.com then have subfolder like www.abc.com/de/

Avoid choosing subdomain, If you go for a subdomain, you will lose your current authority as Google assumes subdomains as a separate domain.

As you wish to develop your website for other language use properly translated content from the native speaker of the language and use it under subfolders. If you simply use any API to translate your content then you will hit by Google's Panda Update for having poor content quality.

Avoid creating a new domain, instead, book that domain and redirect to the subfolder version (www.abc.com/de/)

Hope this strategy helps you!

Thanks, I did it. How long do you think it will take for Google to take action against the web spammers? Any Idea!

You have to use 301 redirect. Read this link from Google Search Console help https://support.google.com/webmasters/answer/6073543?hl=en

you can preserve the "link juice" from SEO perspective if you use 301 redirect.

Keyword stuffing, particularly hidden keywords (1116 keywords) in all pages and unfortunately the website ranks 1-5 position in the first page of google

Like how we can "suggest an edit" in Google Business Listings, is there any way to report Google about the webmaster guidelines violation?