Luca Maori, a defence lawyer for Knox's co-defendant Raffaele Sollecito, said the trace's very existence also indicated the knife had not been washed. "It is something very important," he said. "It is absurd to use it for a murder and put it back in the drawer."
Prosecutors deferred comment for their summations, due later this month.
Knox and Sollecito were convicted in 2009 in the brutal slaying of Knox's 21-year-old roommate in the apartment their shared in Perugia, and sentenced to 26 and 25 years in jail, respectively.
The conviction was overturned on appeal in 2011, freeing Knox after four years in jail to return to the United States, where she remains for the latest appeal.
Italy's highest court ordered a fresh appeals trial, blasting the acquittal as full of contradictions and questioning failures to retest the tiny DNA trace in light of new advanced technology.
A spokesman for the Knox family in Seattle, David Marriott, was seeking comment from Knox on Wednesday's testimony, but he said she was busy with classes at the University of Washington and doubted she would have anything to say.
The DNA evidence on the knife found by investigators in a kitchen drawer at Sollecito's apartment has been among the most hotly contested pieces of evidence in the original trial and now in two appeals.
Prosecutors have contended the knife was the murder weapon because it matched Kercher's wounds, and presented evidence in the first trial that it contained Kercher's DNA on the blade and Knox's on the handle.
But a court-ordered review during the first appeal in Perugia, where the murder happened, discredited the DNA evidence. It said there were glaring errors in evidence-collecting and that below-standard testing and possible contamination raised doubts over the DNA traces linked to Kercher on the blade, as well as Sollecito's DNA on Kercher's bra clasp.
Sollecito, in an emotional 20-minute-long address to the court on Wednesday, said Knox was "my first real love in my life, even if it was very late".
He acknowledged he hadn't taken seriously enough the accusations at the beginning because he was too caught up with his new romance with Knox to grasp the severity of the situation.
"Me and Amanda were living the dawn of a carefree romance, and we wanted to be completely isolated in our love nest," Sollecito said. "It was a little fairy tale."
He said he has since been living a nightmare, and he struggled with his composure as he pleaded with the court to acquit him. "I hope I'll have the chance to live a life, a life, because at the moment I don't have a real life," Sollecito said. "That's what I'm asking you."
Prosecutors begin their summations later this month, followed by the defence in December.
A verdict is expected in January.
- AP