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Dripping blood from the penis is a symptom that can show up in prostate disease in male dogs. These dogs usually also have difficulties in defecating. Cystitis, which is more common in female dogs, is accompanied by bloody urine and difficulty urinating or having accidents.
If your dog has blood dripping from his penis, it is always advisable to get an examination from a veterinarian who can physically look at the dog and make an educated assessment.