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The Serpent Crystal is actually not one crystal form, but eight small crystal spheres that forms into the complete crystal. Each of the eight spheres bears an element of Orochi's heads, and these are arranged by the formation of four spheres at the base, three on the second layer and a single crystal on the top. However, since sightings of the Serpent Crystal are only at angles of limited view of the crystal's back, only these elements can be made out for each layer of the crystal: Fire, Wind and Darkness for the base; Water and Lightning for the second layer; and Light for the top. It is unknown whether Earth is on the base and Poison on the second layer or the other way around.
Not much is known of the Serpent Crystal, but it seems to have some connection to Orochi as it is able to dispel his barrier. It is briefly mentioned by Waka when Amaterasu meets him again in Taka Pass. Issun, believing Waka to be up to no good, convinces Amaterasu to find it before he does. After much questing and eventually ending up at the Gale Shrine, they explore the shrine until they find it in a round room. However, Crimson Helm shows up and fights Amaterasu, who is aided by the Satomi Power Orbs and Susano.
After the demon is defeated and Susano runs away, Waka suddenly appears, standing rather close to the Serpent Crystal. Issun accuses him of "muscling in on our goods" and has Ammy chase him. Waka leisurely jumps away, telling them that the crystal would be of no use to them. He also informs them that he plans on using the crystal to dispel Orochi's barrier. After giving the pair another prophecy, Waka leaves them in the shrine.
Later on, when Amaterasu is taking Kushi to the Moon Cave, she and Issun find Waka there, meditating intently. He strikes the ground near the barrier with his sword, then pulls out the Serpent Crystal. He places it above his sword and plays his flute, which makes the barrier absorb into the crystal. Waka then tells Amaterasu that she has done her part and to leave the rest to him. However, Orochi interrupts as he takes Kushi into his lair.
In Ōkamiden, there is a similar item with the same purpose of dispelling Orochi's barrier at the Moon Cave's entrance: the Mystic Amber.
The coincidence between the Mystic Amber and the Serpent Crystal doesn't stop here. Both items were obtained in dungeons right before the Moon Cave in the storyline; both were obtained (either by Chibiterasu or a different character) immediately after the dungeons' respective bossesbattles are completed.