Your goal in Fields of Mistria is to contribute to the museum in town. The four wings are further divided into several categories. As the name would suggest, the Insects Wing requires you to donate various kinds of bugs you collect throughout the game. If you're lucky, you might just spot the Crystal Caterpillar during winter. The Crystal Caterpillar is a weather-dependent bug that doesn't appear crawling on the ground. This makes the Crystal Caterpillar an especially challenging bug to acquire in Mistria.
Receiving a Crystal Caterpillar will require there to be a season of Winter with either weather conditions that are snowy or blizzardy. In preparation for Crystal Caterpillar farming, have a look at the following day's weather from the crystal ball item received by Juniper in Year 1.
Because Crystal Caterpillars like to hide in trees, you'll need to physically shake one from one of the many regular-sized trees that can be found across Mistria if you want it to appear. All you have to do is approach the tree and press the action key. Falling leaves or, ideally, a Crystal Caterpillar will let you know if it was successful. Crystal Caterpillars do not spawn at any specific landmark. Any tree on your property, in The Narrows, or along The Eastern Road will have them.
The Summon Rain spell works to bring snow to areas that normally don't get it. So long as you stay put, this spell will continue to work in the area where you cast it. If you can, you should use Summon Rain in a forest. To cast the spell, keep in mind that you'll want one mana sphere.
White and blue are the Crystal Caterpillar's colors. When it falls from the tree, catch it with your Bug Net. You can tell the Crystal Caterpillar apart from two similar insects, the Snug Bug, which are less colorfully patterned. You can't use any of these methods to farm the Crystal Caterpillar, but you can get Snug Bugs by mowing grass or breaking rocks.
The Crystal Caterpillar can be found in the Narrows Insect Wing of the museum. It matches nicely with the Frost Flutter Butterfly, Brighbtulb Moth, Winterpillar, Walking Stick, and Winter Bug Set. If you have donated enough insects to the Winter Set, you may be able to receive a gift when you turn in the Crystal Caterpillar. The reward type and quantity you receive depends on your progression through the Insect Wing. You also have the option to sell the Crystal Caterpillar for 20 Tesserae.
In this sense, knowing Crystal Caterpillar Location in Fields of Mistria, allows you to locate this artifact and continue progress in the game.