Previous studies have suggested that the prosocial effects which arise following synchrony during music and dance may serve as a mechanism for people to bond socially. However, other research has proposed that synchrony could be a mechanism for signalling coalition to demonstrate fitness, which is expressed by a group's ability to effectively cooperate. In the present studies, we compared these theories by showing participants realistic virtual avatars engaged in different forms of group dance and then examining their perceived social closeness and formidability of the dance groups. We conducted two studies to assess the perceptual influence of movement type (unison vs. coordinated) and movement quality (temporally aligned vs. temporally misaligned). We predicted that the difference in the ratings of closeness and formidability would only emerge when the groups align movements, and this was supported. We also hypothesised that unison movement would better signal formidability while coordinated movement would better signal a group's social closeness. However, unison movement yielded higher ratings than coordinated movement for both formidability and social closeness, suggesting that a group should move in complete synchrony to maximally indicate their fitness and social bonds.