Well I can't say it's perfect, but it's hilarious and somehow cute, so I think this icon would work perfectly as avatar. The only thing I think you might think about changing or at least improving a little is the bottom of it. I think it would be interesting to draw some sort of feet for this dragon, and maybe you could try to make it look less like a triangle. The animation of the wings it well made, as for the rotation you could add some more frames to make it look more fluid. As for the colours, I think that these basic colours (without shadings) are perfect for the way you decided to draw the dragon, it's a sort of childish style that I really adore. With childish I mean that it reminds me of the typical drawings and illustration created for babies and children, without too many details, really simple and basics.
I agree with Dany about the feet, although I think there may have to be little legs attached as well. I know it becomes more and more complicated but it is a sweet little emoticon, and an inspired idea.