Martino baffled by bipolar Barcelona
The Catalans had appeared to be coasting to a routine victory as Alexis Sanchez put them in front after just seven minutes, whilst they also missed a host of other chances in a slick performance during the opening half an hour.
However, the game swung in Valencia's favour in a crucial four-minute spell just either side of half-time as Dani Parejo slotted home an equaliser before Pablo Piatti's looping header gave the visitors the lead.
Lionel Messi briefly levelled for Barca from the penalty spot before Paco Alcacer struck the winner as Valencia counter-attacked efficiently just before the hour mark.
And Barca's miserable day was summed up when Jordi Alba was sent-off against his old club 13 minutes from time.
"I was anxious to consolidate our early advantage because the game is not over until the referee blows the final whistle and it felt like we stopped after half an hour," he said.
"This week I said that at this stage of the season you pay a heavy price for any errors and today we committed a lot of errors.
"Probably Valencia's first goal caused us to lose a bit of confidence. In the second-half that made us a bit more desperate, which in turn made us commit more errors. We seemed like one team in the first-half and another in the second."
Defeat means that a victory for Atletico Madrid or Real Madrid against Real Sociedad and Athletic Bilbao respectively on Sunday will knock Barca off top spot for the first time in a record 60 league games.
The Spanish champions have now also dropped seven points in their last four league games and Martino is demanding his players fight back in their quest to retain the title.
"I would say to them that everything continues, that we may lose the leadership of the league, but that we will still continue to fight. We need to play like we did in the first half hour.
"We will try to recover the lost ground on our title rivals. We conceded chances to Valencia and they took advantage of them. We need to keep going and keep in mind how much this hurt us today."
The result was even more remarkable given the chaos at Valencia as they shipped out five senior players in the final 48 hours of the transfer window.
Moreover, before Saturday, Los Che had the third worst away record in La Liga winning just twice in 10 matches.
And coach Juan Antonio Pizzi is hoping their fightback will prove to be a turning point in their season.
"A win against this team, at this stadium, is a huge confidence boost for us," he said.
"We still have a lot of work to do and time to do it. You don't create an identity in 10 games, let alone 90 minutes. We need to keep picking up points whether it be at home or away.
"We noticed at half-time that we needed to compete more and we corrected that in the second-half.
"In the second-half we were very good and dominated the game. We didn't suffer that much at the back and every counter-attack we had looked dangerous."