Ah the owl plastic cup issue.
Okay, when using these. You really need to go lightly on the water.
Until a proper root zone is made. You really need to baby what's been made underneath. And to be blunt, your roots can't breath. I suggest you uppot to a bigger pot. Pour water at the sides so the roots reach out to these wet points. And in doing so, they catch o2/co2 to the dry/ing soil.
Same goes for when it's older. And the top dries in, o2 is drawn into your root zone. I don't like dixy cups. Also, what will compound the issue, (you did punch holes in the end for any extra fluid to run out right?