The move sparked protests across the country and even led Venezuela's attorney general, Luisa Ortega, to surprise observers by rebuking the court on Friday. Ortega has been a long-running ally of both Maduro and Chavez.
Meanwhile, the Latin American trade bloc Mercosur over the weekend moved closer to possibly expelling Venezuela. The country was suspended from the group in December.
"He made a gamble last week, but it blew back. Now he's in a very tough spot, because he doesn't have the strongman image and that's usually the first step in ousting a dictator," said Monica de Bolle, senior fellow at the Peterson Institute for International Economics. "This was kind of like the beginning of the end for him."
"The question is whether this could unite the opposition," she said.
Venezuela has been teetering with a collapse for a while. The country's inflation rate hit a crippling 800 percent last year. The International Monetary Fund forecast last July that inflation would reach 1,600 percent in 2017.
All that said, while the court backed off its decision to fully take over the legislative branch, it left in place sweeping new authority for Maduro to cut oil deals on behalf of PDVSA, the state-run oil company, without congressional approval.
PDVSA has been hemorrhaging cash since late 2014, when global oil prices more than halved. Since then, U.S. crude prices have lost about 50 percent of their value.
— The Associated Press contributed to this report.
Watch: Venezuela's cash problem