@Jabber Thank you ❛ᴗ❛  This is precisely how I feel about this pixel.

 I agree that the background/foreground confusion would be miserable if this were an actual game, but just as an image it makes for an interesting disorienting effect.

If you have just 4 colors you need to restrain yourself to only use 2 colors for the background so that the important elements really pop.

i.imgur.com/y9XnIJC.png

Also you'll find double borders (one border in black and one in white) in a lot of GB sprites so that they work for both light and dark backgrounds:

well, IMO you should think of its readability since this is so hard to read, for us to really understand the piece, at first glance there's is a demon and a lot of nonsense.

Fave! solely for the demon boss.

One trick I use and learnt from Final Fantasy on GB is to use mainly three colours and save the other colour for sprites and colideable objects. For example I use the lightest colour. Borders are definitely useful for such restrictions, I myself have te resort to double pixel outlines for readability even though it then decreases the amount of 'detail'. While you want to express the awesomeness of Murumasa - having it hard to read doesn't quite do it justice. The WIP forums are great for getting feedback in.
I'd do an edit for you but I've kind of got a lot of work to do myself.

@Mikau Thank you. I don't worry much about the Gameboy compatibility or if it's hard to read for some - I just wanted to express myself and how Muramasa is beautiful

From a Gameboy fanatic's point of view, I've learned a few things about making games easier to see on the Gameboy. 

First thing you should know is that unless you're using a Pocket or a Light (other models of the first Gameboy), you're going to have low contrast. That'll make things blur into each other a lot. Games with actual detail (like Megaman Xtreme) become blurry messes in action-y areas. A great way to fix this is to add powerful borders to everything. Yes, this lowers the artistic value of a piece, but it makes it much easier to see in gameplay.

As a picture, this is amazing. As a Gameboy mockup, well...

Definitely needs some outlines and cleaning up, took me ages to even see the character.

 it is quite hard to read IMO. It took me around 10-15 seconds to make out what is what. reducing the overall noise and giving the main character a distinct outline would certainly help this to read a lot better.