I just subbed to iTunes Match.
Am I now safe to move my entire iTunes Media folder to an external drive, never to be seen again?
has
every song been uploaded to iCloud? do a "sort by icloud status" in itunes and make sure everything is matched, purchased or uploaded.
if so, then yeah, you can move the music.
however, since you don't want itunes looking for the local files (which you want to get rid of) when you click a song, you have one last step in itunes to make sure it's going straight to the cloud for the songs
select all music in iTunes, hit delete. choose not to delete from iCloud and not to move to trash.
now every song in iTunes has an icon saying it can be downloaded. it will stream from icloud by default.
now go to folder on computer where music is stored and then move it to external drive.