The three-time race winner started on pole for Sunday's 28-lap Red Bull Ring race, but was jumped off the line by eventual victor Francesco Bagnaia and quickly shuffled back to third.
Bastianini engaged in a tight tussle with Pramac's Jorge Martin – with whom he is vying for a place at the factory Ducati squad for 2023 – and was running in fourth when he ran over a kerb exiting Turn 9 into Turn 10 on the fifth lap.
This led to a dent in his front wheel rim, which caused his front tyre to lose pressure and sent him off into the gravel at Turn 4 before he pulled into pitlane to retire.
"I was competitive today to do a great race," Bastianini said afterwards.
"With 23 laps to go, I was exiting from Turn 9 to 10 and I touched the kerb a little bit and the kerb has broken the wheel.
"The pressure went down and it finished my race. We made a really good weekend from FP1, always better, always [finding] more.
"At the end I'm not satisfied about my result, but for the next race we are [up] there again."
Bastianini believes he would have been able to finish on the podium despite running the soft rear tyre had it not been for his broken front wheel.
But he takes solace in the fact that he was competitive in every session across the Red Bull Ring weekend and believes he can consistently battle for the podium in the final races of 2022.
"Well, I don't know if it was possible to win – probably yes," the Gresini rider added.
"Probably I was good to go on the podium. But we can't say this at the moment.
"Now we go to Misano, my home grand prix, and I'm very motivated because also this weekend we make a good job from FP1, step by step always better.
"So, I think we arrive competitive for the next round but also for the rest of the championship."
