Machado is batting just .229 in 35 games this year following offseason reconstructive surgery on his knee. Duquette acknowledged during an interview Tuesday with Fox Sports that a demotion is "an option."
"That's always an option," Duquette said. "The guy distinguished himself in the big leagues last year. We'd much rather see him develop his skills here. But that's always an option."
Machado, 21, was an All-Star last season, when he batted .283 with 14 home runs and a league-leading 51 doubles. But the third baseman missed the entire month of April this season while recovering from the knee surgery and has struggled offensively since his return, hitting just four homers with 11 RBIs in 140 at-bats.
Machado was involved in a pair of benches-clearing incidents in Baltimore's weekend series with the Athletics, including a scrum Sunday that began when he appeared to throw his bat in retaliation for being thrown at by Oakland reliever Fernando Abad.
Machado also had an incident with the Athletics on Friday, when he didn't like the force of the tag put on him by Oakland third baseman Josh Donaldson, and the two had to be separated. One day later, Machado hit Oakland catcher Derek Norris twice in the head with backswings.
Although he formally apologized for his actions during an interview Monday with the Orioles-owned MASN network, Machado is expected to be disciplined by Major League Baseball.