Why is this the answer?

The answer is squirrel because this clever little riddle paints a fun word picture of one of the most common and busy animals you can find living outside in parks and forests. The riddle has two main parts that fit the squirrel perfectly. The first part is "A nut cracker." This is a tricky way of talking about the squirrel's powerful teeth. Squirrels absolutely love to eat nuts, such as acorns, hickory nuts, and walnuts. As you know, these nuts have very hard, protective shells. Instead of using a metal tool like people do, a squirrel uses its four sharp front teeth, which never stop growing, to crack those tough shells right open. They hold the nut tightly in their tiny, quick paws and chew until the shell breaks and they can reach the yummy food inside. Their amazing teeth work just like a natural, always-available nut cracker. The second part of the riddle tells us where this busy creature lives: "up in a tree." Squirrels are expert climbers and spend most of their time scampering high up in the branches of trees. The trees are their home, their highway, and their special place to feel safe. They build their cozy homes, which are called dreys, out of twigs and leaves, often tucked into the fork of a tree branch or a hole in the trunk. The tree is like their apartment building, giving them a high-up view of the world. When you put these two clues together "A nut cracker up in a tree," you get the perfect image of a furry, quick animal with strong teeth that is always working in its treetop home. They are constantly gathering nuts and seeds to eat right away or to bury in the ground for later, especially when they are getting ready for the cold winter months. This burying is an important job, because they sometimes forget where they hide their food, which helps new trees grow! Their high-up home is the perfect spot for all their nutty activities, making the squirrel the true star of this riddle.