According to the rules you are not aloud to use game sprites (such as copy and pasting them onto your design). Everything in that design was made in Paint/Photoshop by hand (mouse) while playing the game on my computer for reference.
The ship design, the asteroid design and the alien ship design are all part of game Asteroids which was put out by Atari in 1979. While it may be true that you drew all of this by hand, that doesn't change the fact that the original design came from the original Asteroids game which does constitute copyrighted work. On top of this, Asteroids isn't an 8-bit design, it was one of the early vector games.
Your entry would be disqualified from the contest based on two things. First, the work involves copyrighted material. Second, it isn't an 8-bit which is pixel by pixel, but a vector design comprised of lines. Yes, the lines are pixilated in the game, but that was because that was due to how limited the graphics capabilities from that time frame were. The judges will see both these things before the hundred entries are selected and throw them out.
This doesn't mean though you can't come up with an entry that does qualify for the contest.