Both are correct, I think. Depuis is being red-lined.
Freeform Writing Exercise A2
As far as I know, 'depuis là-haut' is a little "awkward" to use as in it does sound strange to my French ears. But I am I am happy to be proven wrong ;-)
Tes parents t'observent de là-haut = your parents see you from above
Je te vois bien de là-haut = I see you fine from up there
I hope this is helpful.
Bonne journée !
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