Would each confirmation take hours?

which takes ages for bitcoin because it has no KGW
To my knowledge it adjusts only every 14 days.

So, yes. Confirmations would take hours then - for the next 14 days at least.

A further selloff could be expected from such a situation starting another death-spiral for bitcoin. It's really good with those negative feedbackloops, isn't it?

I doubt that the confirmations would ever take hours, because the big farms simply wouldn't all switch off at the same time.

Some smaller ones might switch off after 2 or 3 days (when their power bill funds ran out), but most would keep running for at least a week or two, and survive on saved funds. Others would scale down their operation gradually. If the price were to drop to $40, there would probably be a smooth decline in hashpower lasting many months.

Perhaps the current price decline was manufactured by large farms for the very purpose of lowering difficulty and extending their hardware life-cycle?

no, i don't think so. It's built in with the inflation and also some early investors taking profits of course after 100000% profit ...

soon it's not hypothetical anymore.

Question:
what do we do when bitcoin fails?

What is Plan B? Is there a Plan B?

dogecoin? 

It wouldn't be weeks, each difficulty readjustment period is 2016 blocks regardless of how long each block takes.

A massive price collapse paired with a massive miner dropout has nearly destroyed Namecoin once.

That is harder to happen with Bitcoin but it's also that much harder to recover from since there are no alternatives and simply limping to the next difficulty adjustment won't help. Namecoin went to merged mining as a solution, so if that happens to Bitcoin it has to go on over several difficulty adjustments, which may never happen if miner dropout continues.
In that case the Blockchain grinds to a halt, with months between blocks until nobody even bothers to store the Blockchain.

Most people here will claim this can never happen.