From what I understand, the way it's supposed to work is as follows:
Blue (on the controller) when it's the first controller connected to a powered-on PS4.
Red when it's the second controller connected.
Orange when it's charging and the PS4 is in standby. It turns off when the charge is complete.
I'm pretty sure mine flashed orange while charging last week, but it didn't today. However, I just woke the PS4 up from standby and the controller has three bars again.

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