Diving is a flying technique that is only present in the Game & Watch Balloon Fight.
Diving is listed in the manual of the game as an "Advanced Technique" like Hovering, and is accomplished by simply pressing the lower Warp button, which is essentially the system's equivalent of the down button on a Directional Pad. In the manual it gives this description, with some odd typos:
"Dive: Normally, Balloon Man looses altitude set speed but if you wish to make him come down fast, press the lower Warp button. However, be careful not to make him dive to quickly as he may fall into the sea."
Although this technique is impossible in most other versions of Balloon Fight, Balloon Kid allows you to drop your Balloons and fall, though this is less controllable. In Balloon Trip Breeze, it is also possible to carry your Mii downward using the breeze. The Up and Down buttons on the D-Pad go unused in every other game, though.