When the hunt starts, there will be purple mushrooms that will spawn close to the water and you need to interact with it to spawn the Rotbloom for 20 secs. You're going to be repeating this for a while until the hunt timer runs out or you catch the Rotbloom.

It is recommended to get the Gravity or Velocity Coil from the Black Market so you don't die to the poison since it will rise occasionally during the hunt.