As air rises, the pressure decreases. It is this lower pressure at higher altitudes that causes the temperature to be colder on top of a mountain than at sea level.

Why is it cold in higher altitudes?

High-altitude locations are usually much colder than areas closer to sea level. This is due to the low air pressure. Air expands as it rises, and the fewer gas molecules—including nitrogen, oxygen, and carbon dioxide—have fewer chances to bump into each other.

Why is air resting over mountain peaks cold?

When the air is high on the mountain, it spreads out. This is like your big square. The same amount of heat is now in a bigger space, so it is more spread out. So the air is colder on top of mountains because there is less air pressure.