Market cap is a really, really crappy metric but we seem to be stuck with it. It's purely the current price on an exchange multiplied by the number of all mined coins.
You could reduce Bitcoin's market cap by $50 billion by selling a few tens of millions of dollars worth of BTC in quick succession. The price is set by what's on the exchanges and there isn't a great deal on there to meet a giant sell.
That's true, market cap is hypothetical metric. It has no real application and assessment.
Moreover, market cap depends upon the source from which the value is being scraped and calculated. I may sell 1 or even 1000 BTC to someone for $5 each on Exchange A but it won't affect the market cap if Exchange A is not being considered to calculate marketcap. On the contrary, selling even 0.0005 BTC for $5 on Exchange B will drop the marketcap (although for a fraction of second till another order is executed) if Exchange B's data is being used to calculate Market Cap.