Living Rainbow Dye

This is the one that moves. The color rolls through the spectrum across the sprite instead of sitting still, so the item reads as motion even while you stand there. On a cape or a set of wings that is the entire point. On a small accessory it collapses into noise.

Normally it means Hardmode, a mechanical boss down, and then feeding Strange Plants to the Dye Trader until the right reward comes up. There is one exception: on the rainbow themed secret seed the rainbow dyes are scattered into ordinary chests at world generation, so on that map it can turn up long before you have any business owning it.