That light is definitely too close IMO. Minimum 24 inches away at this stage, even if it’s set low. These aren’t like CFLs where you can put them right on top of the plants.
Soil looks pretty dense, anything in there for aeration?
Are there holes in the bottom of your cup? I prefer to have drainage in anything I plant in.
@Pigeonman even invented the “speed cup”
I’m guessing what you’re seeing is either light stress and/or that the roots can’t move through the media.
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