There is some water dissolved in the air. Water vapor. When the air cools, the amount of water it can hold dissolved decreases. If the air can’t hold the water, the water un-dissolves and becomes a cloud.
This can happen wherever there is dissolved water and the movement of cool(er) air.
The altitude of the cloud is determined by … wherever the hot(ter), wetter air and the cooler air happen to mix. You’re talking about huge weather and climate patterns, and without specifying a location, there’s no hope but to guess at some explanation that will be super helpful for you.
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