This is actually a Lipschitz function, so thought I should show that it's a Cauchy sequence. I assumed that $f(x_n)=x_{n+1}$. Putting $x=x_{n-1}$ and $y=x_{n-2}$, we get
$$|f(x_{n-1})-f(x_{n-2})| \le \frac 12 |x_{n-1} - x_{n-2}|$$
This gives us,
$$|x_n - x_{n-1}| \le \frac 12 |x_{n-1} - x_{n-2}|$$
Which ultimately gives that
$$|x_n - x_{n-1}| \le \frac{1}{2^{n-2}} |x_2-x_1|$$
Now, I don't know how to proceed from this.....