How to avoid external displays limit in iMac 4K?

Yes, you can enable a 3 display config in roughly three ways:

1) Using an eGPU. This is a real, full powered external GPU connected to the iMac over the relatively fast Thunderbolt 3 bus. You can buy different eGPUs at various speeds, but will generally enable you to do everything on your third monitor that you can do on the first two.

This is how an eGPU is used: https://support.apple.com/en-gb/HT208544

An example of an eGPU where you bring your own GPU (299$): https://www.razer.com/gaming-laptops/razer-core-x

Another example with pre-installed GPU (399$): https://www.sonnettech.com/product/egfx-breakaway-puck.html

2) Using a DisplayLink adapter. This is essentially a kind of "light weight" external GPU that is connected to the iMac over a relatively slow USB device - enabling an extra display suitable for "light weight" jobs. I.e. it is going to be just fine when working with Excel, but if you're going to be playing 3D games, it's probably going to be overworked. Note that there seem to be some complaints about driver instability or upgrade problems, so it might not be a perfect solution.

You can find a list of DisplayLink products here: https://www.displaylink.com/products

An example of a product: https://www.startech.com/uk/Cards-Adapters/Laptop-docking-stations/usb-3-docking-station~DK30A2DH

Another example product: https://store.hp.com/us/en/pdp/hp-usb-c-a-universal-dock-g2

Note that not all of these are necessarily compatible with your Mac.

3) Using an external computer to control a third display communicating with it over either WiFi or wired ethernet. This can be everything from an iPad connected with Sidecar to a complete computer running various remoting software.

The three options are listed in order according to performance. However, note also that the eGPU is usually the most expensive option (if you consider option 3 as using spare hardware that you have lying around anyways).