Your watch may need to be cleaned.
Or you may have developed a sensitivity/allergy to the watch's materials or the LED lights on the underside. You could consult a dermatologist about this possibility.
Apple wants to make sure you reach the right team for help with your watch. Apple recommends that you contact Apple Support directly. Depending on your region, you may be able to reach them here:
Get Support
https://getsupport.apple.com/country
M1 Mac mini, macOS 15.3.1; Watch, series 10 GPS-only, watchOS 11.3.1; iPhone 16, iOS 18.3.1; TV 4th Gen, tvOS 18.3; HomePods, audioOS 18.3 and Airport Express w/ Airplay 2