Cacti are suited to dry, arid environments, and nearly all their problems are related to water. Even most diseases that affect cactus plants attack when moisture levels are wrong. Although some cacti will shrivel during the winter months as part of their life cycle, most causes of shriveling are related to improper watering or moisture levels.

...
Healthy cacti will be firm and smooth.

Water

By far, most problems with cactus are caused by overwatering, but the opposite extreme of not enough water will cause shriveling. A cactus that is too dry to sustain its flesh will begin to shrink, causing the skin to crinkle and the entire plant to appear shriveled.

Proper Amount of Water

The proper amount of water for a cactus depends on the time of year and weather conditions. Generally, provide a good watering that soaks into the soil several inches for the cactus plant once per month. The soil should be allowed to drain and become completely dry between watering. When the cactus is in a fast growth phase or is blooming, generally in spring, water may be needed more often, up to twice per month.

Proper Soil

In addition to the right amount of water, a cactus plant also requires the proper type of soil. Heavy, moist soils will cause problems. The soil should be sandy and drain quickly. Most varieties of cactus prefer a mixture of sand and small pebbles. The right soil will keep moisture at the right level for the cactus and prevent shriveling.

Dormancy

Even with the best care, some varieties of cactus will shrivel once per year as they go into a dormant state for several months. This typically occurs during the winter months when temperatures drop. If an otherwise healthy cactus that normally does well on the amount of water received begins to shrivel, it is probably going into a dormant period. When the weather warms up, it will return to its normal state.