Apple's watchOS 7 adds the ability for supported Apple Watch models to track sleep. You'll need to wear your Watch to bed to utilize the new Sleep app that monitors your motion to calculate your sleep time. Your Watch display will dim during your allocated bedtime so it does not wake you at night.
The new app integrates with the new Sleep feature (previously Bedtime) located in the Clock app. Sleep mode allows your Watch to track how long you sleep and wake you with an alarm. It features several toggles so you can customize your sleep tracking. You can set your own sleep schedule with selected "wind down" time, choose a sleep goal and set a charging reminder. You can also choose to monitor your sleep time within the Health app.The Sleep feature requires watchOS 7 and iOS 14.