The job of a Witcher is never as cut and dry as it seems.
Take it down and head into the cave leading below the tree.
It’s a straight shot under the water to trigger the cutscene with the Ghost in the Tree.
Both answers have long and rippling consequences for this quest, and many others that will follow.
To find the spirit’s bones, exit the cave and follow your waypoint back to the swamp.
You will find it in the Southern edge of the circle on your map.
Have your Axii Sign at the ready and cast it one on of the horses.
You will be free to mount up and ride it back to the Whispering Hillock.
Choose to carry on with it and the spirit will be freed.
Kill The Spirit
The other option, killing the Spirit, is much easier.
It will cast a magical shield around itself and call on Endrega to come fight you.
It will take a few rounds of this before the fight ends, but isn’t terribly difficult.
Depending on what you did, however, his reactions will be quite different.
Witcher 3 Kill Or Spare - Ladies Of The Wood
So, which correct one?
Is the spirit telling the truth, or are you better off killing it?
What Happens When You Free The Spirit?
What Happens When You Kill The Spirit?
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