Why is a rainbow actually part of a circle?
The familiar arch is a perspective effect created by sunlight and water droplets.
How a raindrop separates light
Sunlight entering a water droplet bends, reflects internally and bends again when leaving. Different colours of light change direction by slightly different amounts, so they spread into a spectrum. The colour pattern we see depends on the angle between the Sun, the droplet and our eyes.
Why we usually see an arch
For the main rainbow, useful droplets sit at about a 42-degree angle around a point opposite the Sun. Taken together, those droplets form a circle from the observer’s viewpoint. The ground usually hides its lower part, leaving the familiar semicircular arc in the sky.
Seeing more from above
From an aircraft or a high lookout, it can sometimes be possible to see more of the circle if illuminated droplets extend below the observer. No two people see exactly the same rainbow because each person receives light from a different set of droplets. A rainbow is therefore a geometrical relationship between sunlight, rain and an observer, rather than an object fixed in one place.
External references are provided for exploration; Curio Hour’s explanation is written separately.