Resolved high levels of compression in a pixelated photoshop file

i have a file that is 120 x 120, for a ui element, but it has alot of compression and im not sure why
heres the image


you can see at the top there discoloration, my original plan was to have this image as a gradient but with a gradient its even more apparent
im just wondering why this is happening

edit: im an idiot i forgot to generate mipmaps