it was a hallucination by Denis
He khs cus he thought he’s turning crazy?
you could say he was in denial, that he didn't want to believe that Todd was behind all this ( cause he was head over heels for him) Todd has done this to every single one that came to tend the sheep, thats why the man warned him to not trust anyone. Again the blood trail represented his death, like his fall. Todd luring him in by speaking, Denis who believed him those hallucinations, yet didn't want to believe he was the bad guy, fell to be with him, believing he fell into the mountain as well? It's a little confusing cause it's heavily Biblical in terms of metaphors and symbolism.
And the wolf is Satan.
So Tod is a wolf, but why did he khs in the last chapter?