Apple watch Series 7

the red dot is the notification dot if you place your finger on the top of the screen and move it down a bit it will display the notification(s) that cause the red dot to be displayed

if you want to know more

Notifications on your Apple Watch - Apple Support

The red dot is a sign that you have new notifications. So swipe down on the watch and it should disappear. If not swipe down on the face and after that swipe up, and tick clear all