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It looks like a cocoon of some sort but I honestly have no clue. It's made of the leaves/needles of the tree it's hanging in and every few days it looks like fresh ones are added at the top. I've seen it move while I was watching it and it also appears to switch branches every few days
It is probably a species of bagworm. The caterpillar lives inside a silk pouch covered with organic material to protect itself as it eats the trees. It will then pupate inside this case.