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Atletico closed to within eight points of Barca when Adrian and Koke struck in a 2-0 home win, while Real turned in one of their best performances of the season and Cristiano Ronaldo and Angel Di Maria each scored twice as the champions crushed Valencia 5-0 away.
Barca let slip a two-goal lead and were beaten 3-2 at Real Sociedad, although Lionel Messi scored for a 10th consecutive league game to match the La Liga record last achieved by former Barca striker Ronaldo in 1996-97.
Atletico maintained their perfect home record with a 10th victory in 10 league matches this term and have now gone a club record 10 games in all competitions without conceding a goal at their Calderon stadium.
Diego Simeone's side are second on 47 points from 20 of 38 games. Barca have 55 points, while Real, whose erratic form has effectively ended their hopes of a second straight title, remain seven adrift of Atletico on 40 in third.
Ronaldo netted two goals and set up another to power Real Madrid's blistering attack to a 5-0 demolition of Valencia in the Spanish league on Sunday, while Atletico Madrid chipped into Barcelona's lead by maintaining its perfect record at home.
Madrid decided the match by halftime with doubles by Ronaldo and Angel Di Maria after Gonzalo Higuain had opened the scoring.
Atletico, meanwhile, eased to a 2-0 win over Levante despite losing striker Radamel Falcao to injury for its 11th win in 11 home games this season, breathing an inkling of life into the title chase.
Atletico took advantage of Barcelona's first league defeat of the season the day before to reduce the gap to the pacesetters to eight points.
Madrid's best performance, and arguably the best first half played by any team in Spain this season, of its otherwise trouble-filled league campaign left Jose Mourinho's team in third place 15 points adrift of Barcelona.
Madrid finally resembled the side that strolled through the league last season en route to the championship with a record haul of points (100) and goals (121).
"We made the game easy by pressuring them hard from the start,'' said Di Maria, whose season had been subdued until Sunday's match. "We played a great game. On a personal level, I played well and shut a few mouths.''
Madrid had already beaten Valencia 2-0 just five days before in the first leg of their Copa del Rey quarterfinal. The two teams will meet for a third time in nine days on Wednesday in the return leg.
Valencia's collapse was complete.
Its attack was toothless, its midfield sloppy with the ball, and its defense uncoordinated and repeatedly undone with the simplest of through passes into wide open spaces behind its back line.
Madrid, however, was brutally efficient, quick to recover the ball and clinical in its finishing whether on the break or elaborating an attack against a set defense.
"They were completely superior to us,'' said Ernesto Valverde, who had guided Valencia to four wins in five league games since taking over as coach. "Madrid has an extraordinary counterattack. Each counterattack was a clear chance for them. After the 1-0 we still weren't done, but when the 2-0 and 3-0 came so quickly we just fell apart.''
Higuain got Madrid rolling in the ninth minute by making up for an earlier miss when he trailed Di Maria and fired his back pass beyond goalkeeper Diego Alves.
After Sami Khedira had squandered a pair of clear looks on goal, Ronaldo doubled the visitors' advantage in the 35th by running onto a long pass, cutting back_ first to his right, then to his left – to give Di Maria time to arrive on the far side before crossing for the winger to tap home.
Just seconds after the restart Valencia was again retrieving the ball from its net after Madrid robbed the ball and in two passes left Ronaldo sprinting free to stab the ball between Diego Alves and his near post to make it 3-0.
The flurry of goals left Valencia and the fans at Mestalla stadium shell-shocked. And Madrid just kept pouring it on.
Ronaldo whipped in a vicious volley in the 41st after Mesut Oezil had deftly knocked down Di Maria's lobbed pass. And just before the halftime whistle Di Maria was inexplicably left unmarked on the break to take a pass from Oezil and casually slip the ball under the helpless Diego Alves.
Ronaldo's brace gave him 18 goals in the league, tied with Falcao. Barcelona's Lionel Messi leads the competition with 29 goals through 20 rounds.
Elsewhere, Osasuna beat visiting Deportivo La Coruna 2-1 to move off the bottom of the standings and sink its rival into last place, while forward Oscar Gonzalez scored one goal and set up another to steer mid-table Valladolid to a 2-0 home win over Real Zaragoza.
Earlier at Vicente Calderon stadium, Adrian Lopez broke through for Atletico by capping a team buildup in the 32nd minute. Jorge "Koke'' Resurrecion then put the result beyond doubt in the 61st, four minutes after Falcao walked off clutching the upper part of his left leg.
Atletico coach Diego Simeone said Falcao would be sidelined for around three weeks.
Simeone's Atletico, whose excellent season has been overshadowed by Barcelona's apparently unstoppable march toward reclaiming the domestic crown, is on a club-record run of 18 consecutive home wins in all competitions. It has also outscored its visitors 17-0 in its last six league matches.
"Numbers are important, but we can't pause to admire them,'' Simeone said. "The most important thing is to keep going forward game by game until we see how far we can go.''
On Saturday, Barcelona fell 3-2 at Real Sociedad. Also, it was: Malaga 1, Celta Vigo 1; Getafe 1, Sevilla 1; and Granada 2, Rayo Vallecano 0.
Espanyol edged out Mallorca 3-2 on Friday. Real Betis hosts Athletic Bilbao on Monday.



