Knitted circuit: 5mm RGB fade LEDs, 8mm blue LEDs, battery and switch.
The LEDs (both the blue and the RGB fade) are wired in parallel, soldered in place. Fun fact -- red draws the most current. So, when the color-changing LEDs turn red, they draw so much current they starve out the big blues. The result -- the blues fade in and out, no micro-controller needed.
Two knitted circuit boards, with iron-on backing.
My first gif. (The color changes are actually very slow and gradual, not blinking.)