I have some character sprites that I want to import into a 2D game. They are 1028 by 1028, and I have shrunk them down in unity to fit the level. In scene view, they look perfectly fine. In the game view, however, they are very distorted and deteriorated, and I don’t know why. I’ve tried changing my compression and filter settings, but nothing has helped. 
You seem to have made several pixel art mistakes at once. I highly recommend to watch this video. To sum up some of them:
- your textures are too big
- you should stick to sizes that are a power of two for countless of reasons
- never scale pixel art down. This does never work. If you scale pixel art, only scale it up by whole multiples of the texture size.