The sanity system is a great idea for the theme. I love the reaction when firing at the neutral NPCs.
I am impressed that you added intro cutscene in your game, I really like it. :)
Walking backwards would be a great addititon to the gameplay. As the bullets have collision, I tried shooting enemies by letting the bullets bounce of the walls. Then, in order to dodge the enemy bullets you could only move in one direction, if you want to maintain the angle. Or move in a different direction and loose the angle.
You could try to add more emphasis on impacts to improve the game feel/juice. (like adding screen shake and stuff)
Other than that, cool game and keep up the good work!