The display is an optical phenomenon known as a 22˚ moon halo or winter halo.
Scientists call them 22-degree halos because the ring has a radius of approximately 22 degrees around the sun or moon.
The halos are a sign of high cirrus clouds drifting 20,000 feet high.
These clouds contain millions of tiny ice crystals. The halos you see are caused by both refraction, or splitting of light, and also by reflection, or glints of light from these ice crystals. The crystals have to be oriented and positioned just so with respect to your eye, in order for the halo to appear.
They are actually far more common than rainbows and occur about 100 times each year.
The ice crystals in the clouds all deviate the light similarly, but only the ones from the specific ring at 22 degrees contribute to the effect for an observer at a set distance.
