This is normal. When you're "on the go" the needle will "peg". When you're at idle, engine hot, in Drive, it should be somewhere between 1.5 and 2.5ish. Sometimes when the sender fails, they stay at 3 all the time, but if you're seeing it dip down, that's normal behavior. My 500SL never dips below 2 after it gets to operating temp.

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Current stable:
1995 E320 157K (Nancy)
1983 500SL 125K (SLoL)

Gone but not forgotten:
1986 300SDL (RIP)
1991 350SD
1991 560SEL
1990 560SEL
1986 500SEL Euro (Rusted to nothing at 47K!)

Gone and wanting to forget:
1985 524TD 167K (TotalDumpster™) [Definitely NOT a Benz]