The 2016 champion, Carreno Busta had his sights set on the semi-finals of the ATP 250 tournament but he suffered a surprise 7-6 (7-2) 6-3 loss on Friday (AEST).
"Of course it's a great feeling. I had a great match today. These conditions suit me," Ivashka said. "I think he had more pressure because he's the top seed so for me it was a good challenge to see what my level is and to compete with these guys, so for me it was a great match."
Carreno Busta, who trumped world No.1 and 20-time grand slam champion Novak Djokovic to win bronze at the Olympic Games in Tokyo, was not the only seed to fall.
Richard Gasquet and Frances Tiafoe also crashed out in the quarter-finals after defeats to Emil Ruusuvuori and Mikael Ymer.
The only seed to advance to the semi-finals was No.15 seed Carlos Alcaraz, who saw off Marcos Giron.