'Fire rainbows' are a rare phenomenon that only occur when the Sun is higher than 58° above the horizon and its light passes through cirrus clouds made of ice crystals. At the right alignment, the ice crystals act as a prism, and refract the light to look like a rainbow.
A "fire rainbow" appears in the sky on July 31 over South Florida. The rare phenomenon occurs when clouds containing uniformly sized water droplets diffract light and scatter wavelengths into a colorful ring-like pattern. Photo by Ken Rotberg, WPTV.
This is a rare meteorological phenomenon called a skypunch. When people see these, they think it’s the end of the world. Ice crystals form above the high-altitude cirro-cumulo-stratus clouds, then fall downward, punching a hole in the cloud cover. Freakishly weird!