Xhaka appeared to swear at the Emirates Stadium crowd after his second-half substitution prompted sarcastic cheers and booing during the 2-2 draw.
The Arsenal midfielder cupped his ears, waved his arms angrily and ripped off his shirt before storming down the tunnel.
Xhaka has faced calls to be stripped of the Arsenal captaincy after Gunners boss Unai Emery admitted the Swiss midfielder’s reaction was wrong.
But the 27-year-old, who was also booed against Aston Villa earlier this season, has now revealed he reached boiling point following a series of sick taunts toward him and his family via social media.
“My feeling of not being understood by fans, and repeated abusive comments at matches and in social media over the last weeks and months have hurt me deeply,” he wrote on Instagram.
“People have said things like ‘We will break your legs’, ‘Kill your wife’ and ‘Wish that your daughter gets cancer’.
“That has stirred me up and I reached boiling point when I felt the rejection in the stadium on Sunday.”
Xhaka missed Arsenal’s League Cup fourth-round loss at Liverpool on Wednesday as Emery took him out of the firing line.
But he was already a disliked figure among many Arsenal fans after lackluster displays since his 2016 arrival from Borussia Monchengladbach.
His failure to block the cross that led to Palace’s equalising goal on Sunday was the final straw for some at the Emirates as they vented their frustrations.
A decision over the captaincy remains to be announced, although Xhaka is said to retain the backing of Arsenal’s players, who voted him skipper in pre-season.
With Arsenal due to face Wolves at home on Saturday, Xhaka’s statement will keep the issue firmly in the spotlight.
Despite the lengthy message, he did not offer a direct apology for his actions, only saying sorry if people felt he had been disrespectful.
“In this situation I let myself get carried away and reacted in a way that disrespected the group of fans that support our club, our team and myself with positive energy,” he added.
“That has not been my intention and I’m sorry if that’s what people thought.
“My wish is to get back to a place of mutual respect, remembering why we fell in love with this game in the first place. Let’s move forward positively together.”