The colours are real in the sense of being produced by Earth's atmosphere rather than chromatic aberration artifacts in the telescope.
Rays from objects near the horizon slant through the atmosphere and encounter density gradients due to the air being more dense near to the surface. The rays are refracted towards the denser air, i.e. towards Earth's centre.
The overall effect is that objects near the horizon appear to be higher than they really are.
The effect is wavelength, colour, dependent. Red rays are refracted least and red images appear less raised than those in other colours. Stars, Venus, the Sun have a slight lower red rim. The upper limb can, as here, be blue but blue light is strongly scattered by the atmosphere and usually we have an upper green rim.
This is normal refraction. It is far too weak to give a green flash. Green or blue flashes rely on mirage conditions to magnify the colour separation.
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