I have an oncid/odonto intergeneric called Nettie Valentine... Just went throught the same thing with her... Her old pseudobulb is withering, but her new bulb (after repotting in a sufficient, new medium) has plumped back up and is continuing to look much healthier now! Best of luck with your 'chid!
Oddly enough, after really closely inspecting it this morning, I'm convinced it might have a spike hidden in the side of that new bulb that is growing. That would be hilarious, considering I've never had an orchid spike even though I've owned them for years. They are only in spike when I buy them. I'm convinced it's because I don't use fertilizer. Maybe that will be my new goal this year.
I just use a general all-purpose orchid fertilizer put out by Schultz... works great and it comes with a measured dosing spoon inside the container, too!