It's been long rumours and now more sources are confirming it; the upcoming watchOS 7 is likely to come with sleep tracking and a blood oxygen monitoring, a feature that is becoming increasingly popular on Android smartwatches and even fitness bands have incorporated thus far.
Sleep tracking has been available on some of the Apple Watch series though you will need other sleep tracking apps to do so, and as battery has been limiting on the Apple Watch series, it's likely you will end up recharging the device overnight instead. As such, it's possible that either the Apple Watch Series 6 will come with an obvious battery upgrade, or the device and watchOS 7 may have lower battery usage to accommodate sleep tacking. It might even be both.
While it seems that this is obviously being set up for the Apple Watch Series 6, it seems that this new OS might also appear on older Apple Watch Series devices, though mainly from Series 3 and up. It turns out that these features, especially the blood oxygen monitoring, had always been available on the hardware, but the software couldn't support it. This also likely means that Series 1 and 2 support will end soon.
Other features to look out for include a kids mode as well as a Touch ID sensor. But as all of this remains uncomfirmed, it will stay as merely rumours for now.