When soap is dissolved in water, the molecules arrange themselves in the form of a cluster such that their hydrophobic ends are away from the water molecules and their hydrophilic ends are towards the water molecules. This process is known as micelle formation and the cluster formed is called as micelle.
These micelles are formed because their hydrocarbon chains come together and the polar ends are projected outwards. Micelle formation in ethanol will not occur because the hydrocarbon chain of the soap will dissolve in ethanol. Soaps in the form of micelle are able to clean dirty clothes having only spots, as the oily dirt gets collected in the centre of the micelle, which forms an emulsion in water. On rinsing, the water washes away the micelles with dirt attached to them.
