Multiscale modeling using an embedded cluster approach is presented and applied to study the structure and properties of molecular crystals. We discuss the results of hydrostatic compression modeling of 1,1-diamino-2,2-dinitroethylene obtained with the embedded cluster model and the Hartree-Fock method and compare these with the full periodic crystal structure calculations. Details of the electronic structure of the perfect, highly compressed material are discussed. The results demonstrate the applicability of the embedded cluster model. We show that the band gap of the perfect material is not sensitive to hydrostatic compression, but some changes induced by the pressure take place in the valence band.