Don't know about the accuracy of the tracking data, but yes, it's possible for an aircraft to experience a sudden drop, for lots of possible reasons. I experienced it once when a plane I was on was struck by lightning and the electrical systems sputtered for a couple of seconds; the pilot said that we dropped about 100 feet.

I know that there was an incident a couple of years ago near here on a day with bad visibility, where an AA flight came out of a cloud bank to find an F-18 crossing its path. The pilot dove quickly so that they wouldn't collide, and several passengers ended up with minor injuries.