Thanks for walking through how you achieved this effect, it'll be super useful for me as I'd like to use this cycling technique in my own game! I just wish there was some way to interpolate colours in GB Studio so you don't have to do it by hand. But maybe the new update will help with that :).
(Also, thanks for mentioning Mark Ferrari which lead me to watch his GDC talk which was also really helpful).
Viewing post in Palette Cycling on the Game Boy Color comments
That GDC talk is one of my all-time favorites. Unfortunately, I don't think you can do all of the effects that he did in the GBC due to how palettes work, since every 8x8 tile is limited to four colors...I'm still working on that though, I'll be sure to update this demo if I ever figure out more advanced animation techniques
Can you imagine the upcoming parallax scrolling with palette cycling? Gonna be beautiful