During the Mistress of the Iron wood quest, you will be exposed to Jotnar magic and how it can be used to create illusions to hide things in plain sight. After you have discovered the hidden house in the tree, you will be tasked with locating a hidden waterfall. When you get there, no water can be found, where is the waterfall?!
This is another mystery with the Jotnar Magic. The waterfall is there, you just need to look at things from the right angle. The same rules applied to the house. Run around the area and look for the orange/yellow orbs that are floating in the air. Once you find these, you are close to solving the mystery. If you are stuck, the solution is below.
How To Reveal The Hidden Waterfall
You will need to walk upon the platform that overlooks the main pond area. Once you get up here you will see the orbs first. Keep an eye out for the stone structure at the peak with the wooden posts that contain the deer skulls. Jump through this and it will reveal the waterfall for you.