Citing a Fox News headline about a judge tossing Daniels's suit, Trump tweeted: "Great, now I can go after Horseface and her 3rd rate lawyer in the Great State of Texas".
The US leader has frequently mocked the senator by calling her "Pocahontas" at political rallies and on Twitter - in response, Senator Warren yesterday released a DNA test she took that shows "strong evidence" that she had a Native-American ancestor.
Los Angeles U.S. District Court Judge S. James Otero denied this case on Monday.
Daniels, whose real name is Stephanie Clifford, signed the hush agreement after she was paid $130,000 by Trump's longtime personal lawyer, Michael Cohen, to keep quiet about the alleged dalliance in the weeks before the presidential election.
Avenatti appealed the ruling to the 9th Circuit Court of Appeals, he wrote Monday night on Twitter.
LEADING OFF: Red Sox seek to clean things up vs Astros
He slammed down his helmet and bat down and jawed with plate umpire James Hoye before Red Sox coaches ran in to get between them. It would be a big step toward becoming the first team to win consecutive World Series since the 1999-2000 Yankees .
"Everybody gets to say what they want to say, and you can come after me, and I can come after you, because that's what the Constitution gives us", she said.
Daniels was suing the president over a particular tweet from April, in which he effectively accused her of lying.
Ms Daniels says she had a sexual affair with Mr Trump in 2006.
"The amount of the award for President Trump's attorneys' fees will be determined at a later date".
"Instead, Mr Trump sought to use language to challenge Plaintiff's account of her affair and the threat that she purportedly received in 2011".
Earlier this year Daniels launched a crowdfunding campaign on website CrowdJustice to cover " legal fees and potential damages" related to her suit against Trump.
The defamation claim is separate from another lawsuit that Daniels filed against Trump, which is continuing.