One month on from the start of the Bhamo offensive, KIA controls much of the urban area of the city, but SAC forces continue to hold out in the main bases of MOC-21. Similarly, in Mansi the SAC still holds the LIB 319 & 601 bases and Artillery Battalion 523.

These reports give a clear indication that AA are moving into Ayeyarwady and, with the South Western Regional Command in Pathein severely depleted due to the fighting in Rakhine over the last year, it may prove difficult for SAC to prevent a deep advance.

Yes, this would be a sensible strategy. It will give them a very strong hand, with a wide range of options for whatever comes next.

December also saw the capture of several major bases:

Rakhine, Ann - Western RMC + Light Inf. Battalions 371 & 372
Rakhine, Toungup - MOC-5 + Light Inf. Battalions 346 & 544
Rakhine, Maungdaw - Border Guard Police Battalion 5
Chin, Mindat - Inf. Battalion 274

And a visual representation of towns captured :
Squares = States/Regions
Diamonds = Divisions
Circles = Townships
Red highlights = Recent/ongoing major battle
Colours match the map
Size proportional to population

AA is strong, but it's also in a precarious position right now and needs international support to consolidate control in Rakhine. China is vital for them right now.

And the junta has full control over large, functioning ports in both cities, they could withdraw forces anytime, if they wanted to.

It would also be interesting to see where the Chinese PMC is located. If they are concentrated around China's key interests on Maday Island, then this would be far enough away from the SAC bases and the city to allow AA to attack.

This is one possibility but, even in victory, negotiations require an exchange of some kind. SAC may surrender some or all of the remaining territory, but they would expect a ceasefire or peace deal of some kind in return, guaranteed by a strong power with influence over AA.

However, many key issues will remain unresolvable as long as Rakhine's new status is unclear. While a declaration of independence would simplify the legal status of negotiations, it is more likely that Arakha will remain an autonomous quasi-state for some time.

Dhaka has strong interests at stake with a new power in Rakhine, including trade, border security and the issue of right to return for the one million Rohingya refugees in Bangladesh. The Arakha Army must also prioritise engagement with their only potentially friendly neghbour.

Meanwhile, Bangladesh has confirmed it is in contact with the Arakha Army regarding border issues.
https://buff.ly/3BYnpOg

This comes shortly after engagement with AA was raised at a meeting of the Bangladesh Institute of Peace and Security Studies.
https://buff.ly/3ZQ69CI

It is not yet clear whether the SAC government is also willing to negotiate, as they continue to make military preparations on the border with Rakhine. Or whether the AA intend to continue their military offensives while discussing a potential peace.