Of course, you will have to calculate this LocalYVelocity which is a projection of the world-space velocity to the player object-space (or player-space).
And then you will have to convert the set LocalYVelocity back to world-space :D (lots of fun isn'it?)
Well if you look at the last capx I cooked for you you might find some ways
By the way, it's < JumpCap and JumpCap should be negative. It's the Vertical velocity you want your player to have if you release space and you're still under its value (which means you're still going up in player space). You don't cap to 0 to avoid too sharp transition but to a low negative value.