Barca went in front after seven minutes but were pegged back just before half-time, with Valencia taking the lead a matter of minutes after the interval.
Lionel Messi restored parity with a penalty before the hour mark but Paco Alcacer put Valencia in front again shortly after.
Barca ended the game with 10 men after Jordi Alba was dismissed and Martino believes his team switched off much too soon.
“The feeling was that the game was over after 30 minutes and we paid dearly,” he told a post-match press conference.
“When you can step on your rivals, you have to step on them, finish the game and win,” he added.
Martino however denied that the defeat could prove decisive in the League title race, insisting that the result merely changes the complexion of the competition rather than determines it.
“All the options are intact but now we begin to play a different League to what we have done so far.
“[The defeat] is hurt that has to hurt today but not affect the future.
“We must move forward. Next week we have two very difficult games against Real Sociedad and Sevilla.
“Every time we lose a game we play, we care.
“And it’s much more in the League, where losing a game means losing a piece of the championship.
“But we will fight without any doubt and try to adjust the mistakes.”
Martino had started his Press conference by paying tribute to Luis Aragones, who passed away on Saturday.
Read the original article on Football Espana - The ultimate website for English-speaking fans of Spanish football