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Anata will inform you that the medallion you seek is in a cave that rests high on the peak of a mountain. The caves have become infested with a dark evil that is somehow tied to the sorcerer Thoth-Amon. In order to retrieve the medallion you will have to scale the mountain. This will require you to build up your climb skill to at least 100 if you have yet to do so.

Make your way towards the climbing point leading up to the Blessed Caves. It can be found at coordinates 736, 1042. Once there begin your climb to the top. At the summit you will find the entrance to the Blessed Caves. Take note that once you enter, there is only one way out and that will require you to press forward.

Once you enter the cave you will notice a man quivering in the corner. Speak with him and he will tell you of the dark rituals of evil taking place within the caves and of a crimson demon residing in its depths. He will then tell you that the dark sorcerers use Black Lotus to keep the creature under control, but if you were to introduce a large amount with the next sacrifice you might just weaken it enough to be killed. At the end of the conversation you will receive the update for Imprisoned and acquire the third step in this quest line.

(Note: Until you poison the alter the Blood Defiler is invulnerable to your attacks.)