Hold one's breath means to wait anxiously or expectantly. The correct answer is this meaning because the expression is used figuratively, not only by its literal words.

Examples:

• The audience held its breath before the result was announced.
• In an HSC essay, Hold one's breath can express this meaning: to wait anxiously or expectantly.
• When this expression appears in a passage, connect Hold one's breath with the idea of to wait anxiously or expectantly.