Preliminary counting placed Mr Yushchenko’s party third after the ballot and the president is now considering which major party to align with to retain power.
Yulia Tymoshenko’s bloc finished second but forming a coalition with her party would be a humbling concession as six months ago the president sacked Ms Tymoshenko as Ukraine’s Prime Minister.
On the other hand Mr Yushchenko’s other option is to side with the ballot’s front runner, former president Viktor Yanukovych, leader of the main pro-Russia opposition party.
Volodymyr Fesenko, a political analyst in Kiev has described the current dilemma in front of the president as "a choice of the lesser evil."
Swing to the old guard
In late 2004, anger over rigged elections sparked the peaceful “Orange Revolution” which forced Viktor Yanukovych out of office and swept Viktor Yushchenko to power.
Mr Yushchenko promised to move the ex-Soviet nation away from the influence of Moscow and towards integration with the West and the European Union.
But in just over a year, his government has been plagued by infighting and many Ukrainians feel that the President has failed to deliver on his promises.
But a coalition government with Mr Yanukovych’s pro-Russian party would mean a further set back to Mr Yushchenko’s plans to westernise Ukraine.
"If he unites with (Yanukovych's) Regions Party there will be a pause and foreign policy goals won't be announced for a time," said Vadim Karasyov, a Kiev pundit.
Tymoshenko risk
An alliance with Ms Tymoshenko however would likely spook foreign investors whom Mr Yushchenko needs to prop up plans for broader partnership with the West.
Although Ms Tymoshenko has a large base of support is in the nation's Ukrainian-speaking nationalist east that favors Western integration, she herself is viewed as a less stable economic leader.
Investors are wary of Ms Tymoshenko's interventionist tendencies and her vow to continue reviewing questionable privatisations if she returns to power.
Watching closely
Russia and the West, which wrangled over the 2004 "Orange" standoff, were keenly watching the outcome of Sunday's election.
Washington hailed "a groundwork for a promising future" while the European Union urged Kiev to continue reforms and wished "the next government will want to come closer to the EU."
Moscow meanwhile hoped for a government "that stands for development and deepening of cooperation with Russia."