The reason that a big halo or ring is around the moon sometimes is because of the refraction of Moonlight which is reflected just sunlight from ice crystals in the upper atmosphere.
It's basically just like the way a rainbow is produced by water droplets reflecting the light.
It's when sunlight is refracted through water droplets you see either the rainbow or the ring or halo around the moon.
So there's water droplets in the area around the moon when you see a halo or ring around the moon.