`Water = H_2O`
`Ethanol = CH_3CH_2OH`
In `H_2O` , H is positively charged and in ethanol O is negatively charged. When these two mix with each other a powerful hydrogen bond can form between H atoms in water and O atoms in ethanol. So the ethanol particles will partially slide in to the water particles.Due to this they will come closer and will pack closely. This result in slightly decrease in the total volume.
Now these two substance that is water and ethanol can formed hydrogen bonding which inturns reduces reduces the volume due to intermolecular attraction between them.
The hydrogen bond is formed between oxygen(electronegative element) of ethanol and water via hydrogen atom. so when they are mixed the volume get reduced.