Just like Alien Resurrection hinted at a sequel back in 1997, 20th Century Fox took a look at box office receipts and hit the cancellation button.
When the Alien Covenant bombed, they did the same thing.
The Alien / Prometheus prequel time-line is dead, effectively.
When we eventually do see the Alien franchise return to the big screen (and I'm convinced it will happen), it won't a continuation of what Ridley Scott had planned (although I would have loved to have seen what David did next). I think they'll instead revisit the Ripley character, or, most likely, her daughter, Amanda.
Reduce the budget, take the franchise back to it's horror-house roots. That's what I think is more likely.