If I start a bogus company, issue a million shares to myself and then sell a single share to my buddy for $1, then my company is "worth" $1M. The assumption is that the sale is a fair price and indicative of what other shares would sell for. If he then sells that share on for $50, the company is "worth" $50M. If that share is then sold for a penny, the company is now worth $10K. The $50M didn't "disappear", it didn't really exist in the first place.
USD transactions aren’t on the blockchain. You have no idea how much liquidity there is. Wash trading coins is known to be rampant, so even the smallest sell off to USD may cause a massive price drop.
Don’t worry, the unregulated exchanges can wash trade the prices right back up again. Just don’t be left holding a bag when the USD liquidity runs dry.
The record of transactions are only of BTC Wallet->BTC Wallet transactions. They say nothing about how much they're worth in other currencies or materials. And even if they did, like we can get essentially all stock market transaction data (stock X sold for Y at time T), it doesn't prevent the value from going down (or up) independently of that historical price. It just creates certain points of resistance where it's harder for it to move beyond, but it can still happen. See the various stock market crashes in the past.
The blockchain tracks bitcoin transactions not USD. The USD price of Bitcoin can change without any on chain transactions.
Market cap is last price times total supply. Only a few coins are sold each day compared to the total supply so changes in price have a magnified affect on market cap.
For example a blockchain has 10 coins and a fixed price initial sale at 1$ per coin. All coins are sold so the market cap is 10$ which refects the total money sunk into the coin.
But now someone sells their coin for 2$. The market cap is now 20$ but only 11$ we're spent on the coins.
Well all this price action only happens in the databases of the exchanges, not on the blockchain. And on the exchanges only a miniscule share of all coins get traded. The "market cap" is then only extrapolated. E.g. Bitfinex, which seems to have the most volume, only saw 40k bitcoin traded, in sum, for today, which was less than $2B USD.