By wearing the Magic Cape, Link will be invisible as long as he has Magic Power remaining. If Link selects the Magic Cape from his inventory and uses it by pressing the Y Button, he will become invisible until his Magic Power runs out or until he pushes the Y Button again, or if he selects some other item. Only Link's shadow remains while he is using the Cape. Enemies cannot do any damage to Link, but he needs to keep an eye on his Magic Meter."
"In the Graveyard, Dash into the headstone which is furthest to the east. It's a cave entrance."
"Link can walk right past obstacles and enemies as long as he has enough Magic to power the Cape."
The Magic Cape is an item that appears in A Link to the Past.
A Link to the Past
The Magic Cape is an optional item, and its main use in to turn Link invisible as long as he has enough magic left in his Magic Meter. It's great for rooms with lots of enemies or hazardous puzzles. The Magic Cape drains Link's magic very quickly, so it is advised to use this item sparingly.
This item is found in the Graveyard in Light World. Link must have the Titan's Mitt to be able lift the dark blocks surrounding the grave, then must dash into the grave to open and enter it. The Magic Cape is inside in a Treasure Chest.
Magic Cape Sprite From A Link to the Past