It's cool, cute, and verye simple. The pink outline in the middle of his face is WAY too dark compared to the rest of his tones, please chnge right away (same with the "eye"). Bubbles look good, simple gradients are way overused, so I would suggest a simple transparent background (the bubbles would look impressive with a transparent background). I agree with sedge, it doesn't look like a squid, nice try, but it's still a cute fictional animal. The dithering is a nice touch, but he looks way too textured than he should (squids are smooth, my guess).
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