Arsenal have long admired the Argentina international, having seriously considered a move for him last year before opting to sign Viktor Gyökeres instead.
It could now be Gyökeres who indirectly holds the key to any Álvarez switch, with Barcelona reportedly having turned their attention to the Swede after accepting they will not land Álvarez themselves.
Atletico Madrid remain determined to keep hold of their striker in the face of sustained interest from Barcelona, with both head coach Diego Simeone and chief executive Miguel Ángel Gil publicly insisting throughout the summer that Álvarez is going nowhere.
"If the club owner has spoken so categorically, then there's nothing more to say," Simeone told reporters on Tuesday.
Yet with Álvarez reportedly "not being in the right condition to play" amid the ongoing speculation, Atlético are said to have concluded that a move to Arsenal would be considerably more palatable than sanctioning a transfer to a fellow La Liga rival.
According to The Guardian, that stance could hand Arsenal an important advantage, with Mikel Arteta said to be continuing his efforts to convince Álvarez that a move to north London represents the right next step.
Arteta is reported to have personally contacted the striker earlier this week over a possible switch to the Emirates Stadium. Álvarez remains keen to leave Atlético this summer, but his own preferred destination continues to be Barcelona, even as the Catalan club's focus shifts toward alternative targets.
Álvarez joined Atlético from Manchester City last year and has established himself as one of Simeone's most important players, contributing heavily to the club's attack in his debut campaign in the Spanish capital.
Real Madrid had a bid in the region of £130m rejected for the striker earlier this year, underlining the scale of any fee required to prise him away from the Metropolitano, though it remains unclear whether Arsenal would be willing to test that valuation before the window closes.
Arsenal's own sporting director, Andrea Berta, previously held the same role at Atlético before moving to Emirates Stadium last year, a relationship that has been cited as a potential factor should talks between the two clubs ever move beyond speculation.