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How did the Peace of Westphalia weaken Habsburg power in 1648?

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Stone ruins of Habsburg Castle, also known as Habichtsburg, stand on a hill above green vineyards in Aargau canton, Switzerland, with a flag flying atop the tower. — House of Habsburg Ruins of the castle of Habsburg, or Habichtsburg (“Hawk's Castle”), built 1020, the original seat of the house of Habsburg, Aargau canton, Switzerland.

The Peace of Westphalia in 1648 significantly diminished the power of the house of Habsburg by curtailing both their imperial authority and their territorial control.1

The treaty weakened the Habsburgs in several key ways:

Loss of Imperial Authority: The settlement recognized the full territorial sovereignty of the German princes, empowering them to contract treaties with foreign powers. This reduced the Holy Roman emperor and the Diet to a "mere shadow" of their former power, effectively ending the emperor's ability to centralize control over the empire.2
Territorial Losses: The Habsburgs were forced to cede their lands in Alsace to France. Furthermore, the treaty formally recognized the independence of the United Provinces of the Netherlands, finally abolishing Spanish Habsburg sovereignty over the northern Netherlands.12
Diplomatic Constraints: By establishing France and Sweden as guarantors of the peace, the treaty granted these foreign powers the right to interfere in the internal affairs of the empire, further limiting the emperor's autonomy.2

While the Habsburgs maintained their hereditary lands and successfully retained the Bohemian crown as a hereditary possession, these changes collectively ended the dynasty's aspiration for European hegemony.31