"Angela Merkel knows quite clearly that she is living through the last months or through the previous year of her chancellorship", Werner Patzelt, a politics professor at the Technical University in Dresden, told NBC News.
Over the last two weeks, voters in the states of Hesse and Bavaria also punished her party and coalition allies CSU and SPD in two separate regional elections.
Merkel has led the CDU since 2000 and has been Germany's leader since 2005.
Yahoo Finance UK's Alanna Petroff spoke to Florian Hense, economist at Berenberg, who said "we see a risk that someone could take over the party and she would not serve her whole term [as chancellor]".
The ARD exit poll showed only 13 percent of CDU voters believed Merkel had helped the party in Hesse, down from 70 percent at the last state election, reflecting voter anger at her decision in 2015 to welcome nearly one million, mainly Muslim asylum seekers. The CDU is due to hold a conference in December at which the party's leadership is up for renewal.
These poor results come hard on the heels of another weak showing in Bavaria in mid-October where the centre-right CSU plummeted in the polls and lost its parliament majority. "I have said over the past few days that Angela Merkel knows best what to do, and now she has decided".
Oil Falls on Oversupply Worries Despite Iran Sanctions
Front-month Brent crude oil futures were at $75.82 a barrel at 0656 GMT, down 35 cents, or 0.5 percent, from their last close. Referring to the significance of oil market stability he said , "Stability in world oil market is in favor of U.S.
After speculation by media and politicians alike around why the chancellor made the announcement, Ms. Merkel said she had chose to signal that she had heard the message voters were sending.
Indeed, Ms. Merkel, has been the main voice calling for pan-European unity as the nationalist forces rise across the continent and southern Europe, wary of Germany's economic might, tries shake off the lingering effects of the deep recessions after the 2008 financial crisis. Merkel herself blamed the losses on infighting in her national government. When Hesse last elected its state legislature in 2013 - on the same day that Merkel was triumphantly elected to a third term as chancellor - they won 38.3 and 30.7 per cent, respectively.
The second is Annegret Kramp-Karrenbauer, nominated by Ms. Merkel a year ago to become general secretary of the CDU, a role spanning administrator and spokesperson. The Social Democrats also saw huge losses in the elections.
Pressure from within the Christian Democratic Party, CDU, was already mounting on Merkel before Sunday with internal critics saying at the very least she should not stand for reelection as the leader of the CDU in party elections scheduled for December.
"We are witnessing a continuation of the pattern in place ever since Merkel's mistakes in the 2015 migration crisis: The gradual but steady erosion of her political power", Carsten Nickel, managing director at consultancy Teneo, told Reuters. That would be the worst result in the region for the Social Democrats since World War II.
SPD chief Andrea Nahles said her centre-left party, Germany's oldest, had failed "to break free from the government" and carve out a clear profile of its own after serving in multiple, compromise-laden "grand coalitions".
The result means the anti-immigration party, which entered the federal parliament for the first time previous year, is now also represented in all 16 German regional assemblies.