Make sure you have the H1 layer selected. Go to Filter > Blur > Motion Blur. Set the Angle to 0 and the Distance to be 350px and press OK. Now press the M key on your keyboard to activate the Rectangular Marquee Tool. Drag a rectangle as it is shown in the image below. Make sure that it covers the shape almost in half. Then press the Delete key on your keyboard to delete half of the shape. That way you get a nice clean/sharp edge on the bottom, and a diffused/blurred shape on the top.