Jonathan Jackson fell behind independent candidate Andrew Wilkie as the Hobart-based seat was recounted on Tuesday, and trails the former Iraq War whistleblower by 1091 votes, with most of the election day votes counted.
An AAP analysis of the count predicts that Mr Wilkie will maintain a lead of about 650 once preferences are distributed from those votes.
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But Mr Jackson said he was not yet ready to concede defeat.
"It's gone up and down, and now it's just waiting for tomorrow," he told AAP on Tuesday.
"My understanding is that most of the postal votes will be done by tomorrow and we'll have a clearer indication then."
The final result of the seat may not be known for another 11 days, as the deadline for all postal votes is next Friday.
The Greens' Denison candidate Geoff Couser also says he has not given up hope of winning the now crucial seat.
Mr Couser sits fourth in the primary vote count behind the Liberals' Cameron Simpkins.
