Oversmoothing is a common issue in graph neural networks (GNNs), where node representations become excessively homogeneous as the number of layers increases, resulting in degraded performance. Various strategies have been proposed to combat oversmoothing in practice, yet they are based on different heuristics and lack a unified understanding of their inherent mechanisms. In this paper, we show that three major classes of anti-oversmoothing techniques can be mathematically interpreted as message passing over signed graphs comprising both positive and negative edges. By analyzing the asymptotic behavior of signed graph propagation, we demonstrate that negative edges can repel nodes to a certain extent, providing deeper insights into how these methods mitigate oversmoothing. Furthermore, our results suggest that the structural balance of a signed graph-where positive edges exist only within clusters and negative edges appear only between clusters-is crucial for clustering node representations in the long term through signed graph propagation. Motivated by these observations, we propose a solution to mitigate oversmoothing with theoretical guarantees-Structural Balance Propagation (SBP), by incorporating label and feature information to create a structurally balanced graph for message-passing. Experiments on nine datasets against twelve baselines demonstrate the effectiveness of our method, highlighting the value of our signed graph perspective.