How do I ( 24F ) interpret his ( 26M) behaviour?

So, I go to meet a situationship of mine. At this point I know he likes me and finds me incredibly attractive and I like him too. So we were watching tv series and cuddling for a while and he tries to touch me and hold me more intimately but I wasn't sure where I stood. I just laughed it off, then I felt sleepy and fell asleep on his chest and kinda open my eyes to him seamingly pleasuring himself... He notices I woke up and gives me a gentle kiss on the head and hugs me. I actually don't know how to interpret this. Because this happened on our 2-3 date. Should I be offended? I'm not understanding, I didn't feel anything at that moment, i did stay there for few more hours after that and met him couple of times post that. Just in retrospect I don't know how to make of it?

How do I ( 24F ) interpret his ( 26M) behaviour?
Post Opinion