And judging by the slight bulge / irregularity, you've got, the appears to be the start of a seperation / issue with the structural integrity of the tire. Get a new one. Not to be smart, but I wouldn't want to think about it every time I was carving a corner or descending a big hill. I'm no expert on bike tires, but have plenty of experience with car tires to know the sidewall is the worst place for damage.