Well, this is my third year participating in the jam, and I consider it a nice tradition. I've been participating in this event ever since I started drawing pixel art, and I consider it a personal challenge to learn and brainstorm ideas.
This year was a very difficult challenge, since I usually use a lot of colors in my work, and having to work with 1-bit was very challenging.
Regarding the theme, the first thing that came to mind was an octopus doing acrobatics on top of a house. After a few pencil sketches, the idea of a takoyaki restaurant came to mind.
Out of curiosity, I showed my work to a friend, and he told me it looked like a background from a Beat 'em Up game.
Sorry if it's not very clear; I don't speak English, so I used the translator.