Bleeding is a status ailment which can be caused by wolves (and other enemies?). It causes the player to lose health over time.
Bandages can be used to slow and eventually stop bleeding (and restore some health). Frost Fern Bandages can be used to instantly stop bleeding, and restore even more health.
Bleeding will eventually wear off, if you can keep your health up long enough.
Info Needed: What enemies can inflict this status? How fast does health drain? (The description for bandages says bigger wounds may require more; are there differing levels of bleeding?)