Certified GKH Gardening Expert
It depends on the exact tree in question. The soil should not remain wet, but should not dry out more than 3 or 4 inches until it is established.
Unfortunately, your photos did not come through, so I cannot see the state of the tree to tell what is going on with it.
To me, it sounds like transplant shock. Most of the time, this is due to overwatering the young transplant.
This article will help explain: