Is it Sunnah to squat when drinking water?

The Sunnah is for a person to drink water while sitting, and it is disliked for him to drink while standing. The prohibition is understood to mean a disliking of tanzih (discouragement, not outright prohibition). The Prophet, peace and blessings be upon him, drank while standing to show that it is permissible, so both situations are permissible. There is no known specific authenticity regarding the qurfasāʾ (squatting) posture being established from the Prophet, peace and blessings be upon him, when drinking.