How to Move Disk Image to External Hard Drive to Free Up Space

I got error that system won't load because I don't have enough space to launch PSE 2020 with my Mac OS. Recommendation is to move Photoshop Elements Disk Image with 3.37 GB. I want to move it to an external harddrive. I seem to have the same disk image in Documents and in Downloads. Do I move both to my external harddrive to free up space so PSE will launch at startup?