The Lakeside Crystal Cave is found within the southern region of Liurnia of the Lakes, directly south from the Scenic Isle Site of Grace.

After entering the cave you will find yourself in a large open area. Stick to your left and jump up the hill to clear out the Demi-Humans. There is an item at the second, lower campfire and a tunnel to another room with a Demi-Human Chieftain. Afterwards, head back and to the middle of the cliff to find an area to drop down to. Once you are at the bottom, you will enter a room containing 3 Crystal Snails and another room with many more, but these will take some time to attack. Drop down again to find Soft Cotton x2 on a body on the ledge and then drop down to grab a Smithing Stone (2), Smithing Stone (4) looted from two more corpses, and a Lump of Flesh. Once you proceed, you will get ambushed by three more snails. Turn left to fight the Boss, Bloodhound Knight. He is very agile and can close gaps quickly. Upon his Death he drops the Cerulean Amber Medallion.

After defeating the boss, continue through the arena to find the Slumbering Wolf's Shack. You can meet Latenna here and there is a Rune Arc behind the shack.