In trading crypto, there are people who trade crypto derivatives or futures. In this kind of trading, people either short (predict that the Bitcoin might go down, so they get profits) or Long (predict that the Bitcoin might go down, so they get profits). On top of that, they use leverage (Borrowed funds). Once they open a position with leverage with funds in his account acting as collateral, a liquidation price is set. If the market price goes against the opened position beyond that liquidation price, the exchange's Liquidation engine will close the position and take out all the collateral the trader used for borrowing.
So in the case of the recent market uptrend, there are traders who opened short positions against Bitcoin and most of them probably had their liquidation prices set at 30K,33K, 35K depending on the leverage and entry prices. When the Bitcoin price rapidly moved upwards, the positions that had no stop losses got liquidated, leading to news of massive liquidations.
You don't need to trade deratives or futures to get liquidated actually. You just need to make margin trading with random (real) coins. Margin trading means you use borrowed funds that let you short or trade with a leverage. And if you are liquidated it's because your balance dedicated to the position in case of
isolated margin trading or your overall account balance in case of
cross margin trading is no longer sufficient to cover the loan. The exchange will then sell your funds in order to repay the loan.
That is to say if you are shorting BTC against USD for example, they will sell your collateral in order to buy back the BTCs borrowed you had sold in order to make your short trade.
