Holloway admits it is possible that the 30-year-old could leave The Den before the close of the January transfer window, but says he will not force him out.
And the Millwall boss insists McDonald could still have a future in SE16.
"Scott and I have had some discussions," Holloway said. "He needs to deal with how he feels and where he is in his mind.
"I haven't got any issue with him, we're getting on fantastically well. I don't do confrontation because you never know what is going to happen. I never say never to anyone.
"But I've told him how I feel and I went without him on Tuesday night.
"If that helps him to do what I want, then there is no problem between us and I will have no issue with welcoming him back to the fold.
"But if he does what he thinks is right, and not what I think is right, then he won't be here, it is as simple as that."
McDonald's agent has been exploring possible destinations for his client ahead of Friday's 11pm deadline for transfers, with a shock move to China one option under consideration.
http://www.newsatden.co.uk/31383-mcdonald-will-not-be-forced-out-vows-millwall-manager.html