Time domain distortion vs Harmonics
I think this is simply a property of your signal and you indeed have two significant frequency components. I don't really know the nature of your signal, but for me, it makes perfect sense, you can distinguish two periods in your signal, as shown on the plot below:



As you can see there is period $\color{green}{T_1}$ and $\color{brown}{T_2}$ between consecutive "peaks". So by doing very rough approximations from your plot:


Corresponding frequency for $\color{green}{T_1}$ can be estimated as: $\dfrac{1}{7.1-6.3}=\dfrac{1}{0.8}=1.25 \mathtt{Hz} $
In case of $\color{brown}{T_2}$ you get: $\dfrac{1}{6.7-6.3}=\dfrac{1}{0.4}=2.5 \mathtt{Hz} $


Some quick and dirty plot of such case with two sinusoids of a given frequencies and amplitudes:



So indeed you have two frequencies present in your signal. What's more, component around $2.5 \mathtt{Hz} $ can be stronger. Please consider that your signal also has very prominent DC component (also visible at your spectrum).