Most fish aren’t really. You’re specifically thinking of coral reef fish. Most fish, saltwater fish included, are just muted browns, greys, and silvers.
Reefs are a very unique and colorful environment and some of the most densely populated habitats in the sea. The leading theory is that reef fish are so colorful to help differentiate in such a crowded environment.
There are so many different fish species going every which way on a reef that the colors and patterns help them recognize rivals and potential mates of their own species.
Many colorful reef fish actually change color at night. Their colors fade, their patterns become blotchy. This helps them hide at night while they sleep, tucked away in nooks and crannies in the reef while the nighttime predators roam.
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