Answer:
Some suggestions I recommend would be to not reach to pick it up from above you because this can startle him and make him feel threatened. I've also heard that being near the dragon helps a lot too. It can create comfort for him, knowing that you're near. This can also help him get used to you without overstepping boundaries. Try stroking its head when you pick it up and when you feed it, make sure you hand feed. If you choose to hold him, don't overdo it. Only keep it short and try doing this multiple times a day.
It's going to take time, so be patient! I hope this helps you and your baby stop feeling threatened near you. :)