The 25-year-old came close to joining Liverpool at the end of the summer transfer window only for Palace to pull out of the deal at the last minute.
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Guehi will now leave the club either in January or as a free agent once his contract expires at the end of the season.
Spanish giants Real Madrid were said to be keen on signing the England international as they seek to rebuild their injury prone backline.
Now, according to a report from AS, Xabi Alonso’s side have been put off a deal due to the centre-back’s wage demands making a move ‘virtually impossible.’
Liverpool are likely to reignite their interest in Guehi, with German side Bayern Munich also big fans of Guehi.