Pixel Art in Scratch Technique #1 - Very easy using the "pixellate" effect.. Technique #2: - Pixellate using the costume editor, use the dragon for example: - 1] Make sure it is in Bitmap mode Click "Convert to Bitmap" mode if necessary 2] Select the whole dragon with a select box. 3] Shrink it down using the corner resize tool to pretty small 4] click away, then reselect and re-enlarge Voila! hopefully now you have a pixellated dragon. Technique # 3 - Draw your own! Select create new sprite from Scratch. In the costume editor "click convert to Bitmap" if not already in Bitmap mode. Zoom in a lot! Select Paintbrush and set size to 1. Draw your pixelart or pixelart character. Use the sprite size control to bring it back to normal size on screen.
Source for these great ideas: https://scratch.mit.edu/discuss/youtube/2DifRhibXf4/