Market cap is an indicator of value and value is an indicator of confidence.
The value of any currency, whether crypto or fiat, is entirely dictated by the sentiment of the market and the fundamentals of the currency. It has been this way since Nixon took the US off the gold standard and the world followed.
So to answer your question a drop in market cap can mean both a pull out of investors or a drop in value. If the value of bitcoin is $1.00 and there are 1000 coins then the cap is $1000 but drop the price to 50cents and the cap is $500. But in a market this low I doubt people are cashing out huge amounts and taking a loss, it is likely though that this correction was caused by a combination of a whale sale of bitcoin and the fear that followed turned into a loss of confidence.