When slightly below Y=60, this visual glitch appears.

When slightly below Y=60, there is a graphical glitch that shows pure blue below a certain point in the sky. Tested in a Customized world smaller than 60 blocks high. A possible additive is that I happen to be in a ocean biome, and lowered the water to Y=30.
Reproduction: Go slightly below Y=60 in a world that is smaller than 60 blocks high normally.
Edit: This seems to have been fixed in 1.10-pre1