Yes, you can move your iMovie library to an external drive, as long as the drive is formatted either Mac OS Extended (Jounaled) or APFS. Safer first to copy, rather than transferring, the library over and then you can delete the library on your internal drive. Here's the procedure:
Locate your iMovie library on your current device. Should be in the Movies folder. Select the library's icon and do an Edit/Copy. Then Edit/Paste the iMovie library folder to the properly formatted external drive that you've chosen. Depending on the size of your library, the copy process may take some time. Once the copying is complete, a copy of your iMovie library is now in the new location. Confirm that it is working properly. Then you can delete the duplicate library from its original location on your internal drive.
Be aware that if you must reformat your external drive the reformatting process will delete all data on the drive. So before reformatting or doing any copying you should first back up the external drive to save any data that you want to keep.
-- Rich