Use the Sixel protocol: https://en.wikipedia.org/wiki/Sixel.
xterm -ti 340
sudo apt install libsixel-bin
curl -sL https://raw.githubusercontent.com/saitoha/libsixel/data/data/libsixel-1.png | img2sixelNote that xterm shall be compiled with --enable-sixel option and shall be launched with the option -ti 340.
Limited to 16 colors.