The chameleon minimizes its body profile
The chameleon sucks in its body to provide as small of a profile as possible.
Meaning: Your chameleon is scared and wants to be as small as possible with the thought of escape. By minimizing their body profile they can hide behind branches and put the branch between them and the potential predator. It has been said that chameleons are mostly air and their ability to flatten their body or minimize their body certainly supports this!
Solution: Stop your intrusion into their cage or stop whatever other animal or chameleon is concerning them. This can be another chameleon in the cage or in visual range, a bird out the window, a dog running around, or you putting your hand in their cage. Whatever is causing the stress, remove the source and this behavior will go away.
This Veiled Chameleon felt exposed and not confident at all for this photoshoot so the entire time I had this sucked-in caricature of a chameleon as my model.