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Yes this could be from a nerve issue or a problem with skin irritation.
If it springs back up after you smooth it down then I'd suggest you see your vet with the cat to check for either a disc issue causing a problem with the nerves in that area or a skin problem leading to a sensation that makes the cat lift its fur.
There is a problem called Feline Hyperesthesia Syndrome which this might be related to but that makes the skin roll. You can read about that here
Hope this helps you!