i would be thiniing to transplant it in atleast 1 gal now rootball grow twice the height and yours looks stretched a bit might wanan take the light closer a bit ... leaves starting drooping like that when they are there overwatered or your root are beginning to be stunt .. id transplant water with PLAIN water no nutes utill that seedling is 3 weeks-1 month old
****edit**** when you transplant burry that hole streatched bottom part of the stem it won't change anything but your plant won't be has much streched and will look more bushy and more healthy, you can even burry the round leaves they will fall off in a week or so anyway just bury the whole thing until first set of real leaves