@☆MintyHorizons☆ thanks for the advice. Unfortunately I live in Canada so right now it can’t go outside but I’m hoping we have some warm weather this summer so I can put him out.
More sun is never a bad idea for a cactus. Maybe reduce water or put more time between each watering date. I live in desert, and usually a cactus can propagate even without water, so they can definitely do with a lot less than most plants. Try to leave your pencil cactus outside for a few hours on a sunny day if you can.