Yes, there are important caveats with market capitalization; however when it comes crypto currency it can be a critical component and in many cases is superior to price. The key caveat with market capitalization in my mind the ratio of 24 hr trading volume to market capitalization. By 24 hr trading volume I mean bona fide trades between sellers and buyers that are at arms length. Furthermore it should not be possible to manipulate market capitalization by issuing additional coins which for what ever reason cannot be brought to the market or are held by "insiders" who choose to not bring them to market.

A healthy ratio for (24 hr trading volume) / (market capitalization) is over 1% when the average of this ratio is taken over time. Monero and both the Ethers meet this requirement but for example Bytecoin dramatically does not.

Another area where market capitalization is very critical is when performing long term technical analysis on price. Technical analysis was developed for trading stocks where market capitalization is actually equivalent to price. It can and does work well for crypto currencies for a time frame where one can reasonably approximate market capitalization with price. BBA for example provides technical analysis for XMR, DASH, ETC and ETH. Approximating market capitalization with price works well for ETH or ETC since their inception because the bulk of the coins were premined, may work reasonably well Dash from its inception because of the instamine; however in the case of Monero any technical analysis based solely on price that goes back to the launch of Monero in 2014 should be taken with a serious grain of salt. I am in particular referring to the treating the 0.01111 XBT ATH in May 2014 as a serious resistance level. This chart provides a simple pictorial reason as to why. https://coinmarketcap.com/currencies/monero/#charts