Ask "What's wrong?' when someone seems to be upset (angry, sad, worried, etc.) or in pain. 

When someone asks you "What's wrong?" they expect to hear an explanation of why you're upset. If you don't want to answer, say:

A: What's wrong?

B: Nothing.

A: What's wrong?

B: I don't want to talk about it right now.

If someone asks you "What's wrong?" but you're actually not upset at all, say:

A: What's wrong?

B: What? No, I'm totally fine. There's nothing wrong.