EC2 freeze on installing NodeJS packages NPM/Yarn - AWS

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I am deploying a React + Express API app in EC2 t2-micro - Ubuntu with NGINX The problem is when I try npm i (node_modules is not uploaded), the server freeze and I need to restart it. There is no response from SSH/FTP/HTTP. Via HTTP I am getting 504 timed out.

In EC2 AWS Dashboard -> Monitoring, I see:

enter image description here

This is the system log:

[ 15.627070] cloud-init[847]: Cloud-init v. 20.3-......ubuntu1~20.04.1 finished at Fri, 22 Jan 20..... Datasource DataSourceEc2Local. Up 15.60 seconds 20...: Amazon SSM Agent v3.0.161.0 is running 20....: OsProductName: Ubuntu 202....: OsVersion: 20.04

The Instance Screenshot works fine and I see the login console: enter image description here

The Status Checks are passed and there is no failed at all. It is the same after 30 mins.

In the same time I can't access it via HTTP (504 error) or via SSH with Putty, where I see just an empty console with no symbols.

I have Credit specification - Enabled unlimited mode.

I think, this is about the CPU usage/credits, but I don't know, how to figure out everything. I can increase the instance type, but is it this the only solution ? For t2-micro, we are using a free tier.

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