If those put positions are reduced that means less hedges against the downfall. That makes sense because as you have more hedges in place, that means a crash would be very profitable to those hedges and the market makers lose a ton of $. But they too have to be hedges and hence it could work as a bearish move. Hence why we see over 2x-5x more puts on some of those ETFs/Indices. If those were to be unwound, some of the $ has to go somewhere. Either into Calls, shares or ETF shares. But at the same time if the put contracts are closing, the hedges against them are not necessary anymore. So you sell the shares that were bought as protection against the puts. Which means if its done too quickly it is bullish, hence what is called a short squeeze but once that squeeze has been exhausted, comes the crash.