You are facing a problem because you didn’t host the image file anywhere.
You should upload the image to the internet first, get a link to the image and then use it in N8N.
Use this node to convert the binary data to base64 and then use the string in the html node
Full example below. PS the editor preview might not render the image hence I added the webhook and respond nodes to test in browser. Also I removed the hardcoded == from the html node since base64 will auto add that