Hearing that news, everyone shuddered and was struck with terror.
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Literally 'gallbladder cold'. Traditional Chinese medicine treats the gallbladder (胆) as the seat of courage, so a 'cold gallbladder' = courage drained away by fear.
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胆寒 is literary — common in news and fiction (令人胆寒, 闻之胆寒) but rare in casual chat, where 害怕 or 吓死了 would be used.
