Alvarez has been mired in a lawsuit with Bellator, which currently has a pretrial conference date set for no earlier than Sept. 15, 2014.
However, Alvarez's manager Glenn Robinson told MMAFighting.com on Monday they are still negotiating with Bellator.
"We're not there yet but hoping we can come together [on a settlement]," Robinson said.
Robinson wouldn't discuss whether there was a chance Alvarez could fight on Bellator's Nov. 2 pay-per-view, headlined by Tito Ortiz vs. Quinton Jackson. He also wouldn't specify whether he was hoping the settlement would be a new Bellator deal or allowing Alvarez to sign with UFC.
When reached on Monday, Alvarez refused to comment on his current situation.
Alvarez last fought at Bellator 76 in Oct. 2012 when he defeated Patricky Freire via first-round knockout. That was the final fight on his Bellator contract.
Alvarez later signed an eight-fight contract with the UFC, however, Bellator invoked their existing matching rights, which eventually led to dueling lawsuits by both sides after Alvarez's camp concluded Bellator's offer didn't exactly match the UFC's offer.