Hey,
From my experience what you're doing with the shading (it's called pillow-shading) should be avoided. There is no clear light source, so it looks as if the character is lit from below or from the inside (creepy !), and that makes it look kinda flat.
You should define a light source (usually top-right or top-left)
before you start shading your sprite.
I see you've made an effort of "shading" the outline, it's a good way to subtly give your sprite volume. But as with the rest, the shading of your outline should also follow a clear lightsource instead of randomly alternating between darker and lighter.
I made a (very) quick and (very) dirty edit I made just so you can see what I mean.
-->
It's by no means perfect, but you can see the sprite is lit from the top-right corner and that gives it volume, look at the legs for example, now their shape is clear, I immediately see that they are puffy paws. Remember it's a 3D object you're drawing in 2D.
Your color count is pretty low (8 colors), which isn't a bad thing, but since we can afford it I took the liberty of adding a darker shade of pink to give the pink parts some more volume.
Also, using completely black (#000000) pixels and white (#FFFFFF) pixels usually makes the sprites look strange and "harsh" (except when having a particular style in mind - there are always exceptions). On my edit I darkened the white parts just a tiny bit, I find it's an easy trick that softens the global appearance of the sprite.
As for your character's positioning, you could try and make it look more natural, like it's standing:
If the arms were meant to be that way, sorry
I hope this helps a little, and sorry if I made any mistakes.
