hey there! that is a very nice animation you got so far.The pacing makes the movements feel real and I am especially impressed by how clean every one of your steps look. very pixel minded and you defintively have the patience for an animator :p
1- what is he doing? it looks like a little dance. He looks like some old master, and from what I have here I would assume some kind of dance master I'd guess a Sufi or Sufi analogue (monks that meditate by dancing, mostly spinning) if that's what's he's doing then the general movement is fine, but he kinda has that stereotypical kung fu master haircut so I suspect he might be supposed to be attacking. if he's doing some kind of spinkick the leg should definitively stick out more than the arm ever does so that he has good attack range.
The rythm. if it's supposed some kinda qui-gong like or sufi like dance I guess the slow pace is ok, if not....well tell us what it is so we can tell you how to tweak it :p you did a good job on speeding up while he is spinning, good sense of weight there.
2- Balance. you showed us every steps shows very clearly your thought process, that is very nice.
Now in the first step, we can see the bone structure clearly, and he does keep his balance perfectly, but you did that in a bit of a strange way. The spine stays completely straight all the time this is a bit robotic.
To keep balance any time you tilt something to the right, something else has to tilt to the left.
so for example when you walk, you usually tilt your shoulders one way and your hips the opposite way, just the like one leg goes forward while the opposite arm goes forward.

this is a good example of what's odd about the animation, the guy never does this and it seems a bit robotic.
it comes from a link to a series of videos on phisics for animators (from a phisicist)
https://www.youtube.com/watch?v=zjhRxeR9GXo&list=PLdvNrK-c96RH2MEobcVQqhp8j26Wr1gVkwhile the vids are a bit longwinded and kinda go on too long on tangents for my taste they're very informative.
http://www.scribd.com/doc/26829442/Animator-s-Survival-KitThe animator's survival kit surely has something on this but I couldnt find it by skimming
3. folds. well this one is a bit complicated. I know this instinctually but dont have the best language for it. First thing is that cloth gets lifted when someting interrupts it's normal fall. when you lift it as he lifts his two legs it's alright, cause both his knees are pulling it up. but later only one the leg to (our) left lifts BUT the whole tunic lifts a lot. Really, the left side should've lifted, it's true that all of the tunic is the same object so the right side should lift a little, but if this guy is a master of this dance thing then his tunic should have plenty of slack for him to do this without the whole fabric being pulled up (which I guess is what you were going for but it kinda looks like it all shrunk to a skirt). instead just lift the part to the left a whole lot and leve the right part almost alone.
also, the way the general shadows of the lower portion sort of gravitate towards where the monk's body is not there isnt really realistic. Your face shading is pretty ok, think more like that. The starting point is simply hanging tunic. This should look more like just a hanging curtain, you dont need to point out where the monk's legs are at all. just wrap that around a (for our purposes here) round shape and you should be ok.
Just noticed that you dont keep the highlights on the head the same place troughout the rotation, you kinda stick highlights to features as if they were a texture. That's not how it works. =/ they should pretty much stay on the same place on the picture but reflect according to the shape they're hitting. But to know how to do that you need to know about lightsources. can someone please tell him about lightsoruces? :p
Now, your general instinct of how to create folds is pretty good, you have them all pointing to the part where it sticks out and making arches to the other points of tension when they exist. You should follow that more boldly when strong points of tension appear.That should really dominate when he lifts his leg to be parallel to the ground, make that arch from the knee the basis of your shading when he lifts the leg.

I made this. maybe dissecting it will help :p
If you want to learn about folds you pretty much just gotta observe the shit out of them. just pay attention to what clothes do when you and other people move, hell maybe even on tv or movies. start with simple stuff like a lifting arm and then observe more complex stuff. fully robed people moving around (realistically) happen to be pretty complex :p
Of course, in animation there are always varying degrees of simplification.
in pixelart
King of fighters (specially the later ones) Garou: mark of the wolves. matrimelee. waku waku. Capcom vs SNk.
are all very well balanced between simplifying enough to animate and still make them look like real clothes. the list pretty much goes from most complex to most simplified,
you can find most of those games here
http://www.emugif.com/ Street Fighter 3 also has good cloth animation but it is way more exagerated. it's like the clothes take on the personality of the wearer and have very expressive motion (famous example is ryu's stance). here
http://www.zweifuss.ca/anime is usually pretty good at this too. you could also just go cartoon clothes if you think this is all too much :p
That is pretty much it. You've got a very methodical way of doing things and that's good, I'm very very rash and I have problems with scale that I have to correct all the time, it looks like you'll rarely ever have that problem so cheers for that. Also, incidentally you dont HAVE to be so pixel perfect in the first steps, no one will see that so there's no harm in putting jaggies there or even using big brushes. I use big brushes to draw rough sillouehtes (imagine a sketchy version of your 3rd step) a lot of people do :p... that's if you want to though, if you feel this is easier good for you. I kind of see you growing into making flashback style animations merged with cartoony faces from what you got here, which would be pretty peculiar and neat =) heheh. Please dont lose your enthusiasm for you work and enjoy your dancey monk anims :p