Bitcoin slipped below $60,000 for the first time since late June, wiping out $8.4 million worth of  long contracts in just the past hour, according to Coinglass.

The pain is being felt by Ethereum derivatives traders, as well. Roughly $8.8 million worth of long ETH contracts have been wiped out in the past hour.

Long contracts are essentially bets that the price of an underlying asset, like Bitcoin or Ethereum, will increase. Conversely, traders use short contracts to bet the price of an underlying asset will fall. If the gap between a contract's target price and the spot price gets too wide for the trader to cover the margin, they can be forced to liquidate.

The sudden dive comes a day after Bitcoin spot ETFs in the U.S. saw their net outflow after five days of inflows.

At the time of writing, the Bitcoin price has bounced back above $60,000 and is trading for $60,215.46—down 3.8% compared to the same time yesterday. Meanwhile, the Ethereum price has been a bit more sluggish. It's trading for $3,308.61 at the time of writing, down 4% compared the past 24 hours, according to Coingecko data.

Markets have been bracing for the potential impact of repayments to creditors from the Mt. Gox trustee, which has been overseeing the defunct exchange's bankruptcy process. There's upwards of 14,000 Bitcoin that could start making its way back into the hands of early adopters who have been waiting a decade for their BTC.

There's also the matter of inflation and federal interest rates in the U.S., which have had a pronounced influence on crypto markets.

Investors have been in a risk-off holding pattern—preferring treasury bonds over riskier assets like stocks and cryptocurrency—while the Federal Open Markets Committee has kept the target interest rate at 5.25% to 5.50% since July 2023.

Jerome Powell, Chair of the Federal Reserve, offered little assurance that the FOMC feels rushed to lower its target interest rate while speaking yesterday at an event hosted by the European Central Bank.

"Frankly, because the U.S. economy is strong and the labor market is strong, we have the ability to take our time and get this right" Powell said yesterday during a panel at ECB's Forum on Central Banking. "And that's what we're planning to do."

When pressed by the moderator to say that the FOMC would cut rates in September, he declined.

Powell added that if the Fed lowers rates too soon it might "undo the good work we've done to bring down inflation."