This is a little NES demo by blargg, showing heavy abuse of the palette memory. The moving colors sort of resembles Amiga “copper bar” style raster demos.
Recorded using an NTSC NES, PowerPak, and DVD recorder. It relies heavily on the exact timing of an authentic NTSC NES/Famicom PPU. It fails on a PAL NES due to the different CPU multiplier, and it might fail on an emulator or famiclone.