Your substrate is poorly constituted. You need more perlite/vermiculite/clay ball - "something" - to help with drainage and overall water:gas mixture in the pot. Wood chips are generally a poor choice, as are the clay balls (leca balls). If it's too large and chunky it's less otpimal. Perlite #2 or Vermiculite #3 are good sized bits. Some brands vary in sizes.
If you constitute your substrate properly, it's impossible to overwater. You should always saturate the entire volume when you irrigate. To say otherwise is to instruct poorly.
A plant showing a symptom this early does hint at a root-issue. It shouldn't need fertilizer this early. Unless you altered the light intensity recently, it does not look light-related. If you amped the light up in the last 1-2 days, revert unless you observe excess stretch.
is the soil hot? is the pH okay? need more info to rule out possibilities. It may just need fertilizer a bit earlier than expected, too.
in future - use a smaller seedling pot. add more drainage amendments. high water capacity substrates need about 50% 'drainage' amendment by volume. coco coir needs 33% for comparison. Drowning roots or any sort of related issue akin to that is caused by a poorly constituted substrate. You are supposed to water the entire volume. Not doing so is the wrong behaviour. Allow for top 1" to dry and repeat. simple as that. Any problems result, it is not the procedure at fault.
Due to your substrate, you'll probably see some droop after any irrigation. The plant will survive if you follow a good wet-dry cycle. You can fix the drainage properties of your substrate next time or your next transplant into a large pot, if that is in the cards.