Furthermore, the cape . . . it kinda reminds of how as younger kid I'd draw characters conveniently standing in a hole or behind a wall in order to avoid having to draw their entire body. The character here is fairly interesting so I automatically want to see his entire body and the masking cape feels unnecessary. If you don't want to rework this sprite that much, how about a little cloth upgrade - give that cape a more realistic flowy cloth appearance, some actual wrinkles, rather than those evenly spaced creases; almost looks rubber.
Colors. You sure you need 20? Not that big of a sprite. Notice you've invested the largest orangey ramp to the smallest parts of the sprite. Ought to be the other way around.

I know about the cape. I just have no idea of how to DRAW a good cape. And don't worry, I can rework the sprite, just tell me how to draw the damn cape. Also, I think it would be ok to make his legs/stomach visible. I don't know about the colors. I was mostly looking at Jin and DawnBringers works and they use a lot of colors. I didn't know I had 20, I thought I had 18.
Random idea: insignia logo on cape.
Not a chance. The whole idea is that he will never corrode children's brains by being forever after put in tv-shows(Though it is tempting.)