ORLANDO, Fla. -- A missing 2-year-old girl may no longer be alive, a detective said during a bond hearing in a case that has gained national attention.

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IMAGES: Missing Girl, Mother Images

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Judge Stan Strickland set bond at $500,000 for Casey Anthony, 22, after hearing testimony from officers that a smell in her vehicle was decomposition and not trash and a K-9 dog alerted to human decomposition in her trunk.

Anthony was taken into custody Wednesday after detectives determined her daughter, Caylee, 2, had been missing since early June.

During Tuesday's testimony, new evidence was revealed involving the woman's car.

An attorney asked Orange County Sheriff's Detective Yuri Melich what was found.

"I actually went into the car to smell what the smell smelled like," Melich said. "Before, just before I came into (my current position), I was a homicide detective for two years with the Orange County Sheriff's Office and in my experience, the smell that I smell inside that car was of decomposition."

Melich said officers were told that there was a bag of trash in the car.

"The two smells were not the same," Melich said.

Melich said dirt and a mystery stain are being checked in the trunk of the car.

"Because they found hair samples in the trunk of the car that are similar in color and length to that of Caylee and they also found a stain in the trunk that came up under black light that is questionable," Melich said. "They also found some dirt inside the car that needs to be processed."

"Based on the evidence of human decomposition, would it lead you to believe -- would it not -- that there is a possibility that this child is no longer alive?" an attorney asked.

"Yes, that could be concluded," Melich said.

"Is Mrs. Anthony a suspect in that circumstance?" Melich said.

"I wouldn't use the word suspect, I would use the word person of interest," Melich said.

Deputy Sheriff Jason Forgey also testified that a K-9 cadaver dog alerted to human decomposition in Anthony's car.

"(The dog) put his head inside the vehicle and looked straight to the back seat," Forgey said. "He alerted to the odor of human decomposition."

"In the trunk of the car?" an attorney asked.

"Yes," Forgey said.

Strickland set bond at $500,000 and he ordered Anthony to have a GPS device attached to her body.

He said he didn't think he could please anyone before setting bond.

Strickland also said he's concerned that evidence presented in the court Tuesday possibly implicates Anthony in her daughter's death.

Anthony's attorney says there is circumstantial evidence of a possible homicide, but not enough to give prosecutors the confidence to charge Anthony with homicide, kidnapping or any similar offense.

Grandmother Testifies

Meanwhile, Cindy Anthony said her daughter should be released and is a good mother.

Anthony sat quietly in the Orange County courtroom as Circuit Judge Stan Strickland heard arguments concerning her release.

Anthony's mother testified why Casey should be released.

"Casey has not done anything," Anthony said. "Casey is a good mom."

"Do you want to have alone time with your daughter, to find your daughter?" Anthony's attorney Jose Baez asked.

"Absolutely," Cindy Anthony said. "She hasn't committed a crime. She needs to be home with her family. She can't speak to anybody where she is at. She stated that she was afraid to tell the police. She told them that."

Anthony also said investigators asked what kind of mother Casey is on Monday night.

"It's the first time they asked me questions of, did I ever see bruises or anything like that," Anthony said. "The first time was last night."

Anthony said she would pay the bond to free her daughter.

"Do you think you can speak to your daughter one-to-one and possibly find some information that would help find Caylee?" Baez said.

"I would certainly hope she would want to open up to me," Anthony's father, George, said.

Anthony was denied bail at a hearing last week after investigators said the 22-year-old did nothing but lied to them.

Also, Anthony's brother testified that he tried to delay his mother from initially calling police because he said Casey maintained she knew where the child was and that she was safe. He said Casey told them she would take them to the girl in the morning. "I was pleading with my mother to wait because I knew I could get through to Casey," Lee Anthony said.

Grandmother: Family Likely Threatened

Earlier, Cindy Anthony said her daughter has "her reasons" for not being 100 percent honest with police, during a nationally televised interview.

"She has her reasons why she can't be completely honest with (investigators)," Anthony said. "She told them she was fearful to go to the police. I think Casey is frightened that somebody that she feels very, um, I think Casey is frightened for another person."

Cindy Anthony told Lara Spencer of "The Early Show" that she believes her daughter was betrayed by someone she trusted.

"I think Casey trusted her with the same person she has trusted her with for a long time and that person has betrayed her and has since then been threatening her, and that is why she can't be 100 percent honest in everything that she is telling people," Anthony said.

"I don't believe my daughter is in danger," grandfather George Anthony said. "My granddaughter is the one who is in danger. She is not the one with us."

Anthony's attorney, Jose Baez, said investigators have made the process more difficult by taking Casey into custody when they did.

"My client told me that she does not know where Caylee is," Anthony family attorney Baez said. "We are going to do everything we can to assist law enforcement in any way possible while still trying to protect my client's interest. I have to do my job here. They decided to arrest her at a certain point and launch criminal charges and that is what has made this communication a little more difficult."

Anyone with information concerning the whereabouts of Caylee is urged to call Crimeline at 800-423-TIPS.

Watch Local 6 News for more on this developing story.