Why can't I place the .png file onto the Unity scene?

So I was working on a 2-week long game jam submission when BOOM! a glitch appeared. For some reason, I can't put the .png file into my Unity scene because it's giving me that "No" cursor symbol:

EDIT: Click this instead of the Image icon: https://docs.google.com/drawings/d/1hc8gKzfHeqXu0XetxAzVNAZlkI_XdSFTFxlwFoRFu6w/edit?usp=sharing

 

You need to set the texture type to Sprite.

 

can also set Project Mode, in 2D it sets texture import settings to Sprite by default:
https://docs.unity3d.com/Manual/2DAnd3DModeSettings.html