Primecoin will recover when the Bear cycle is over.
Being on BTC-e is a big advantage, so XPM is far from dead.
I agree- we're in a Bear market and people are consolidating into Fiat, BTC or into a few of the bigger stronger coins. In a Bull market people will look to diversify again and alts will benefit. The market is still finding a floor, and it may go on a little while yet- if we have a movement up in the market I don't think it will be gradual- it will probably be another strong Bull run from some kind of big BTC news/adoptment. I'm still accumulating BTC and a number of alts at the moment- XPM included.
That sounds right to me. Everyone is just waiting for the low point and everyone will start buying when it becomes obvious things are rising. Nobody is too sure how low things will go at the moment, so most people are either selling or holding.