How to make space on I watch for updates

Try this;

Press and hold both the side button and Digital Crown for about 10 seconds, then release both buttons when you see the Apple logo.Wait a few seconds, then hold down just the side button for about 20 seconds or until the “erase all settings” prompt shows up on the screen, then click it, then click the green check button.

Then try pairing with your new phone.

Unpair your Apple Watch via the Watch app on your iPhone.

Then Re-pair your Apple Watch,this frees up a surprisingly large amount of storage space.And without any loss of data.

Or this;

If you don’t have enough space to update your Apple Watch – Apple Support

To unpair and erase watch and remove Activation Lock.

On a computer, go to iCloud.com and sign in with your Apple ID.

Go to Find Iphone.

Select All Devices, then click your Apple Watch.

Click Erase Apple Watch.

Select Next until the device is erased.

Click the remove button next to your Apple Watch.