Don't put litter in the whole cage.
You should get a litter box and put it in the corner that your rabbit is favoring, put some of the dirty litter into the box so your rabbit can smell his waste in the box rather than the whole cage. Every time you change the litter box, put some more soiled litter into it, at least for a few days. Or leave some of the soiled litter in the litter box. I usually takes a week or so to litter train a rabbit, but there will probably always be incidents outside of the litter box, unless the rabbit is spay/neutered. Stray poop is totally normal, as its used for marking territory.
You'll have to take bedding out of the rest of the cage though, and put it ONLY in the litter box. Its confusing for them to have litter all over the place.
I would make the cage higher on the side that the litter box is in, to make sure your rabbit can comfortably jump in and out of the box without hitting its head on the top cage.
Also putting some hay in the litter box will help promote pottying in the box. They like to poop while eating. All my litter boxes have hay in them so she can comfortably eat and potty. And I also have a separate box just for hay.
Hope that helps!