diff --git a/packages/client/src/components/preview/HoverIndicator.svelte b/packages/client/src/components/preview/HoverIndicator.svelte
index 230edeb70c..7d7d3e0540 100644
--- a/packages/client/src/components/preview/HoverIndicator.svelte
+++ b/packages/client/src/components/preview/HoverIndicator.svelte
@@ -4,7 +4,13 @@
   import { builderStore, dndIsDragging } from "stores"
 
   let componentId
+
   $: zIndex = componentId === $builderStore.selectedComponentId ? 900 : 920
+  $: {
+    if ($dndIsDragging) {
+      componentId = null
+    }
+  }
 
   const onMouseOver = e => {
     // Ignore if dragging
@@ -43,7 +49,7 @@
 </script>
 
 <IndicatorSet
-  componentId={$dndIsDragging ? null : componentId}
+  {componentId}
   color="var(--spectrum-global-color-static-blue-200)"
   transition
   {zIndex}