Where do you live and when was it planted? Soil looks very dry, which could certainly have contributed to the problem.

I love in Northern, New Jersey.
I planted it almost two years ago. I have tried to keep the soil watered. In fact, I am worrying I may have overwatered it sometimes. Since I am new to gardening I am really not sure.

A certain amount of interior browning is to be expected with Hinoki cypress, especially at this time of year. But I'd check the soil moisture down alongside the rootball (dig down 8-10", being careful not to disturb the roots). Soil should be just moist to the touch.

To me, this looks to be more a sign of water stress than just typical browning.

Thanks. What exactly is water stress, not enough water or too much water?

interior browning is normal .... no evergreen.. of any kind.. holds it leaves forever ... interior needles are the oldest ... and are shed ... the shedding varies year to year ...

it is increased by transplant until the plant if fully re-established... and with a transplant of that size.. it could take 2 or 3 years ...

it is also increased by a bad winter [especially if not fully established] ...

and its also increased by lack of proper water.. the link should discuss such ...

most conifers are full sun plants .. though some can TOLERATE shade ... this type is in between ... but if it was grown to large size in full sun... and you put it in shade ... it is acclimating to its new microclimate... and that would involve shedding full sun leaves ....

i am not sure what the rope is all about ... you might get some better ideas about such.. if you post a pic of the whole ... it surely isnt holding the root mass ... so i am confused ...

you should have seen some of mine.. after last winter.. when after 30 years as z5... we dipped into z4 ... a LOT worse than yours ...

regardless its not hungry, so dont fert ... .. bone up on watering ... and lets discuss how many hours of sun it gets ...

ken

Here is a link that might be useful: link

What exactly is water stress, not enough water or too much water?

Yes :-)) Sorry, not to be facetious but it can be either. Check and test for soil moisture, then let us know what you find.