How to Make Sense of Market Cap :

Market capitalization refers the total dollar market value of a company's outstanding shares. Commonly referred to as "market cap," it is calculated by multiplying a company's shares outstanding by the current market price of one share. This number gives you the total value of the company or, stated another way, what it would cost to buy the whole company on the open market.

If the "market cap" raises or lowers 10b, this doesn't mean this amount has been put in or cashed out. That "missing" 10b was just a value that was assigned to it based on market conditions.

For illustration:
Billion coins @ $10 is $10b market cap.

If tomorrow one thousand of the coins trade @ $9.

$9k in volume reduced market cap by $1b

What's happening here- a subset of the overall tokens (in the total market cap) are being traded at a certain value, and that value then gets assigned to all tokens in existence, whether they are actually traded or not.

Just because cryptos went down in value does not necessarily mean sell orders drove down that price - it could simply be a shift in what the market perceives the value of cryptos to be.

One other example, imagine if I own the entire milk industry. For sake of simplicity, today it's made up of 100 total gallons, and worth $1/gallon, $100 market. Imagine someone starts selling another beverage in my market, so demand for milk drops and prices dip to $0.9/gallon. That simple shift in market preference cost me $10. No one "gained" that $10 - it simply got destroyed.

Same thing most likely happened to the $10bn in crypto market cap. Shift in market preferences/perceptions drove down the price people were willing to buy/sell and in the process destroyed the value of the market.

So looking at the broader market, you can see this happening – market caps increasing or decreasing based on what people are willing to pay for a subset of the tokens

Essentially what market cap gives you is a starting place for evaluation. When looking at a stock, it should always be in a particular context. For example, how does the company compare to others of a similar size in the same industry?