Why does micelle formation take place when soap is added to water? Will a micelle be formed in other solvents, such as ethanol also?

Soaps are molecules in which the two ends have differing properties, one is hydrophilic (water attracting), that is, it interacts with water, while the other end is hydrophobic (water repelling), that is, it interacts with hydrocarbons. Inside water, the soap molecules arrange themselves in a cluster in such a way that the hydrophobic tails are in the interior of the cluster and the hydrophilic (ionic) ends are on the surface of the cluster. This formation is called a micelle.

No, micelle formation does not take place in ethanol because the hydrocarbon chains (hydrophobic) of soap becomes soluble in ethanol.