Jose Magalhaes e Menezes also revealed that text messages sent by Kate and Gerry McCann were intercepted by police who were suspicious about their role in their daughter's disappearance.
But the texts were not considered as part of the investigation because a judge would not allow it.
But Mr Menezes said he thought the probability of Madeleine being alive was 50/50.
He said the decision to designate the McCanns 'arguidos' - or suspects - was taken by police after sniffer dogs brought to Portugal from England had carried out their searches.
Giving evidence, Mr de Almeida said that the dogs identified blood and the smell of a human body inside the dining room of the holiday flat and in the car the McCanns were using.
The animals also found a scent on a piece of cloth in a flat rented by the McCanns after they left the apartment.
The McCanns' lawyer told the court that the couple were prepared to give evidence but only after Mr Amaral had done so.
The case may now last longer than its expected three days because a new witness - named as Luis Frois - is being called by the McCann team.
He was taken off the case the following October after criticising British police in a newspaper interview.
Mr and Mrs McCanns' status as arguidos was lifted when the investigation was shelved in July 2008.
The same month, Mr Amaral published a book called Maddie: The Truth Of The Lie, in which he called into question the McCanns' account that she had been abducted.
Arriving in Lisbon, Mr McCann said: "No-one can be allowed to say that our daughter can't be found without very good evidence. That's what this court case is about."
Mrs McCann said: "We're looking for justice."
The couple, both 41, from Rothley, Leicestershire, have said that any damages awarded to them would go towards paying for private investigators to look for their daughter.
