When the medium is still damp but not wet you should be able to very gently turn it upside down with the stem between your fingers - do it slowly, the whole pot should come out as a block onto the palm of your hand; if it doesn't bind, plop it back
As it is in quite a large pot for a seedling that may not be for some weeks so get some RootJuice/Rhizo in there
When you start with deepish pots, the plant has to go in that much deeper in the new pot, that's why solo cups are popular cos if you put a clear cup inside a coloured one, you can lift out the clear cup and actually see your roots, and they will be much more compact and easier to water correctly
Short fibre pots work even better as there is no transplanting as such, just drop the whole thing in the new pot when you see roots coming through the walls of the pot
I have had to transplant bare root seedlings before and it's doable, but best avoided if possible
I've also had leggy seedlings that had to go in almost the bottom of the new pot to get the soil level right at the stem