Edible bird’s nest is made by a species of cave-dwelling swiftlets. Weaved from their saliva and harvested in caves and man-made nesting houses, bird’s nests are then painstakingly cleaned ...
Yup, squirrels don't just live inside trees ... Also, that drey may have started as a bird's nest, and then when a squirrel family moves in, it makes it bigger by adding twigs and leaves.