UPDATE: The issue is resolved and I have mentioned the steps in Create unsigned tx (PSBT) in a watch-only wallet using bitcoin core, sign it in electrum and broadcast using bitcoin core
Below are the steps that I followed and couldn't create an unsigned tx. I am not even sure what are the inputs that can be used for it in this case and how to add inputs.
create a watch-only wallet
add one address in 'sending addresses'
dont see anything in 'receiving addresses' and no option to add
open console and run the below commands to add one address
importaddress tb1qu2l4n8st9w3hhsxstd8muaxgnu63fql9rkylmd "receivetesting" false
rescan blockchain to update
rescanblockchain 1800000 1834770
can see the address in 'receiving addresses' and balance
How do I create an unsigned tx because I get the below error and dont see anything in available balance or inputs?
Consider the scenario in which I have added an address from my cold storage to watch the balance and now want to create an unsigned transaction that spends from it which I will sign later on a different machine (offline)
Also receiving and sending addresses in a watch-only wallet is confusing. Not sure at this moment how can we make it easier to understand atleast in the GUI.
I found this on reddit related to same issue however didn't understand how was it resolved: https://www.reddit.com/r/Bitcoin/comments/ir308h/watch_only_balance_not_spendable_in_bitcoin_core/g4w3svg/