Now click on your main circle layer, on your keyboard hold down control(ctrl) and click the little icon beside the layer. This should make an outline around the circle. Now click back in the layer you just made and cut out the part you need and paste it back in the right position. Just delete the part that is left. Now you should have something like this.
Once you have that add this gradient overlay to it.
Then add a gaussian blur by going to filter>>blur>>gaussian blur with these settings.
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